QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State of incorporation) | (I.R.S. Employer Identification No.) |
Title of each class | Trading symbol | Name of each exchange on which registered | ||
☒ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
Emerging growth company |
Page No. | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Item 5. | ||
Item 6. | ||
March 31, 2020 | December 31, 2019 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Short-term investments | |||||||
Accounts receivable, net of allowance for doubtful accounts of $14,793 and $13,026 | |||||||
Other current assets | |||||||
Total current assets | |||||||
Property, plant and equipment, net | |||||||
Operating lease right-of-use assets | |||||||
Goodwill | |||||||
Intangible assets, net | |||||||
Other assets | |||||||
Total assets | $ | $ | |||||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable and accrued expenses | $ | $ | |||||
Accrued property, plant and equipment | |||||||
Current portion of operating lease liabilities | |||||||
Current portion of finance lease liabilities | |||||||
Current portion of mortgage and loans payable | |||||||
Current portion of senior notes | |||||||
Other current liabilities | |||||||
Total current liabilities | |||||||
Operating lease liabilities, less current portion | |||||||
Finance lease liabilities, less current portion | |||||||
Mortgage and loans payable, less current portion | |||||||
Senior notes, less current portion | |||||||
Other liabilities | |||||||
Total liabilities | |||||||
Commitments and contingencies (Note 10) | |||||||
Equinix stockholders' equity | |||||||
Common stock, $0.001 par value per share: 300,000,000 shares authorized; 86,269,033 issued and 85,927,060 outstanding in 2020 and 85,700,953 issued and 85,308,386 outstanding in 2019 | |||||||
Additional paid-in capital | |||||||
Treasury stock, at cost; 341,973 shares in 2020 and 392,567 shares in 2019 | ( | ) | ( | ) | |||
Accumulated dividends | ( | ) | ( | ) | |||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Retained earnings | |||||||
Total Equinix stockholders' equity | |||||||
Non-controlling interests | ( | ) | ( | ) | |||
Total stockholders' equity | |||||||
Total liabilities and stockholders' equity | $ | $ |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
(Unaudited) | |||||||
Revenues | $ | $ | |||||
Costs and operating expenses: | |||||||
Cost of revenues | |||||||
Sales and marketing | |||||||
General and administrative | |||||||
Transaction costs | |||||||
Impairment charges | |||||||
Loss on asset sales | |||||||
Total costs and operating expenses | |||||||
Income from operations | |||||||
Interest income | |||||||
Interest expense | ( | ) | ( | ) | |||
Other income (expense) | ( | ) | |||||
Loss on debt extinguishment | ( | ) | ( | ) | |||
Income before income taxes | |||||||
Income tax expense | ( | ) | ( | ) | |||
Net income | |||||||
Net (income) loss attributable to non-controlling interests | ( | ) | |||||
Net income attributable to Equinix | $ | $ | |||||
Earnings per share ("EPS") attributable to Equinix: | |||||||
Basic EPS | $ | $ | |||||
Weighted-average shares for basic EPS | |||||||
Diluted EPS | $ | $ | |||||
Weighted-average shares for diluted EPS |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
(Unaudited) | |||||||
Net income | $ | $ | |||||
Other comprehensive income (loss), net of tax: | |||||||
Foreign currency translation adjustment ("CTA") loss, net of tax effects of $0 and $(10) | ( | ) | ( | ) | |||
Net investment hedge CTA gain, net of tax effect of $0 and $10 | |||||||
Unrealized gain (loss) on cash flow hedges, net of tax effects of $(6,367) and $(2,741) | ( | ) | |||||
Net actuarial gain (loss) on defined benefit plans, net of tax effects of $9 and $(1) | ( | ) | |||||
Total other comprehensive income (loss), net of tax | ( | ) | |||||
Comprehensive income (loss), net of tax | ( | ) | |||||
Net (income) loss attributable to non-controlling interests | ( | ) | |||||
Other comprehensive (income) loss attributable to non-controlling interests | ( | ) | |||||
Comprehensive income (loss) attributable to Equinix | $ | ( | ) | $ |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
(Unaudited) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | |||||||
Stock-based compensation | |||||||
Amortization of intangible assets | |||||||
Amortization of debt issuance costs and debt discounts and premiums | |||||||
Provision for allowance for doubtful accounts | |||||||
Impairment charges | |||||||
Loss on asset sales | |||||||
Loss on debt extinguishment | |||||||
Other items | |||||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | ( | ) | |||||
Income taxes, net | |||||||
Other assets | ( | ) | ( | ) | |||
Operating lease right-of-use assets | |||||||
Operating lease liabilities | ( | ) | ( | ) | |||
Accounts payable and accrued expenses | ( | ) | ( | ) | |||
Other liabilities | ( | ) | |||||
Net cash provided by operating activities | |||||||
Cash flows from investing activities: | |||||||
Purchases of investments | ( | ) | ( | ) | |||
Sales of investments | |||||||
Business acquisitions, net of cash and restricted cash acquired | ( | ) | |||||
Purchases of real estate | ( | ) | ( | ) | |||
Purchases of other property, plant and equipment | ( | ) | ( | ) | |||
Net cash used in investing activities | ( | ) | ( | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from employee equity awards | |||||||
Payment of dividends and special distribution | ( | ) | ( | ) | |||
Proceeds from public offering of common stock, net of issuance costs | |||||||
Proceeds from revolving credit facility | |||||||
Repayments of finance lease liabilities | ( | ) | ( | ) | |||
Repayments of mortgage and loans payable | ( | ) | ( | ) | |||
Repayment of senior notes | ( | ) | |||||
Debt extinguishment costs | ( | ) | |||||
Net cash provided by (used in) financing activities | ( | ) | |||||
Effect of foreign currency exchange rates on cash, cash equivalents and restricted cash | ( | ) | ( | ) | |||
Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ) | |||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||
Cash and cash equivalents | $ | $ | |||||
Current portion of restricted cash included in other current assets | |||||||
Non-current portion of restricted cash included in other assets | |||||||
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statement of cash flows | $ | $ |
March 31, 2020 | December 31, 2019 | ||||||
Accounts receivable | $ | $ | |||||
Allowance for doubtful accounts | ( | ) | ( | ) | |||
Accounts receivable, net | $ | $ |
Balance at December 31, 2019 | $ | ||
Adjustments due to adoption of ASU 2016-13 | |||
Provision for allowance for doubtful accounts | |||
Net write-offs and recoveries | ( | ) | |
Impact of foreign currency exchange and others | ( | ) | |
Balance at March 31, 2020 | $ |
Accounts receivable, net | Contract asset, current | Contract asset, non-current | Deferred revenue, current | Deferred revenue, non-current | |||||||||||||||
Beginning balances as of January 1, 2020 | $ | $ | $ | $ | $ | ||||||||||||||
Closing balances as of March 31, 2020 | |||||||||||||||||||
Increase/(decrease) | $ | ( | ) | $ | $ | $ | $ |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Net income | $ | $ | |||||
Net (income) loss attributable to non-controlling interests | ( | ) | |||||
Net income attributable to Equinix | $ | $ | |||||
Weighted-average shares used to calculate basic EPS | |||||||
Effect of dilutive securities: | |||||||
Employee equity awards | |||||||
Weighted-average shares used to calculate diluted EPS | |||||||
EPS attributable to Equinix: | |||||||
Basic EPS | $ | $ | |||||
Diluted EPS | $ | $ |
Packet | Axtel | ||||||
Cash and cash equivalents | $ | $ | |||||
Accounts receivable | |||||||
Other current assets | |||||||
Property, plant and equipment | |||||||
Operating lease right-of-use assets | |||||||
Intangible assets | |||||||
Goodwill | |||||||
Other assets | |||||||
Total assets acquired | |||||||
Accounts payable and accrued liabilities | ( | ) | ( | ) | |||
Other current liabilities | ( | ) | |||||
Operating lease liabilities | ( | ) | ( | ) | |||
Finance lease liabilities | ( | ) | |||||
Other liabilities | ( | ) | |||||
Deferred tax liabilities | ( | ) | ( | ) | |||
Net assets acquired | $ | $ |
Intangible Assets | Fair Value | Estimated Useful Lives (Years) | Weighted-average Estimated Useful Lives (Years) | |||||
Packet: | ||||||||
Trade names | $ | |||||||
Existing technology | ||||||||
Customer relationships | ||||||||
Axtel: | ||||||||
Customer relationships |
5. | Equity Method Investments |
Amount of gain or (loss) recognized in accumulated other comprehensive income: | |||||||||
Three Months Ended March 31, | |||||||||
2020 | 2019 | ||||||||
Foreign currency debt | $ | $ | |||||||
Cross-currency interest rate swaps (included component) (1) | |||||||||
Cross-currency interest rate swaps (excluded component) (2) | ( | ) | |||||||
Total | $ | $ | |||||||
Amount of gain or (loss) recognized in earnings: | |||||||||
Location of gain or (loss) | Three Months Ended March 31, | ||||||||
2020 | 2019 | ||||||||
Cross-currency interest rate swaps (excluded component) (2) | Interest expense | $ | $ | ||||||
Total | $ | $ |
(1) | Included component represents foreign exchange spot rates. |
(2) | Excluded component represents cross-currency basis spread and interest rates. |
Amount of gain or (loss) recognized in accumulated other comprehensive income: | |||||||||
Three Months Ended March 31, | |||||||||
2020 | 2019 | ||||||||
Foreign currency forward and option contracts (included component) (1) | $ | $ | |||||||
Foreign currency option contracts (excluded component) (2) | |||||||||
Interest rate locks | ( | ) | |||||||
Total | $ | $ | |||||||
Amount of gain or (loss) reclassified from accumulated other comprehensive income to income: | |||||||||
Three Months Ended March 31, | |||||||||
Location of gain or (loss) | 2020 | 2019 | |||||||
Foreign currency forward contracts | Revenues | $ | $ | ||||||
Foreign currency forward contracts | Costs and operating expenses | ( | ) | ( | ) | ||||
Interest rate locks | Interest Expense | ||||||||
Total | $ | $ | |||||||
Amount of gain or (loss) excluded from effectiveness testing included in income: | |||||||||
Three Months Ended March 31, | |||||||||
Location of gain or (loss) | 2020 | 2019 | |||||||
Foreign currency forward contracts | Other income (expense) | $ | $ | ||||||
Foreign currency option contracts (excluded component) (2) | Revenues | ( | ) | ||||||
Total | $ | ( | ) | $ |
(1) | Included component represents foreign exchange spot rates. |
(2) | Excluded component represents option's time value. |
Amount of gain or (loss) recognized in earnings: | |||||||||
Three Months Ended March 31, | |||||||||
Location of gain or (loss) | 2020 | 2019 | |||||||
Embedded derivatives | Revenues | $ | $ | ||||||
Economic hedge of embedded derivatives | Revenues | ( | ) | ( | ) | ||||
Foreign currency forward contracts | Other income (expense) | ||||||||
Total | $ | $ |
March 31, 2020 | December 31, 2019 | ||||||||||||||
Assets (1) | Liabilities (2) | Assets (1) | Liabilities (2) | ||||||||||||
Designated as hedging instruments: | |||||||||||||||
Cash flow hedges | |||||||||||||||
Foreign currency forward and option contracts | $ | $ | $ | $ | |||||||||||
Interest rate locks | |||||||||||||||
Net investment hedges | |||||||||||||||
Cross-currency interest rate swaps | |||||||||||||||
Total designated as hedging | |||||||||||||||
Not designated as hedging instruments: | |||||||||||||||
Embedded derivatives | |||||||||||||||
Economic hedges of embedded derivatives | |||||||||||||||
Foreign currency forward contracts | |||||||||||||||
Total not designated as hedging | |||||||||||||||
Total Derivatives | $ | $ | $ | $ |
(1) | As presented in the Company's condensed consolidated balance sheets within other current assets and other assets. |
(2) | As presented in the Company's condensed consolidated balance sheets within other current liabilities and other liabilities. |
Gross Amounts Offset in Consolidated Balance Sheet | |||||||||||||||||||
Gross Amounts | Gross Amounts Offset in the Balance Sheet | Net Amounts | Gross Amounts not Offset in the Balance Sheet | Net | |||||||||||||||
March 31, 2020 | |||||||||||||||||||
Derivative assets | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Derivative liabilities | ( | ) | |||||||||||||||||
December 31, 2019 | |||||||||||||||||||
Derivative assets | $ | $ | $ | $ | ( | ) | $ | ||||||||||||
Derivative liabilities | ( | ) |
Fair Value at March 31, 2020 | Fair Value Measurement Using | ||||||||||
Level 1 | Level 2 | ||||||||||
Assets: | |||||||||||
Money market and deposit accounts | $ | $ | $ | ||||||||
Publicly traded equity securities | |||||||||||
Certificates of deposit | |||||||||||
Derivative instruments (1) | |||||||||||
Total | $ | $ | $ | ||||||||
Liabilities: | |||||||||||
Derivative instruments (1) | $ | $ | $ |
(1) | Amounts are included within other current assets, other assets, others current liabilities and other liabilities in the Company's accompanying condensed consolidated balance sheet. |
Fair Value at December 31, 2019 | Fair Value Measurement Using | ||||||||||
Level 1 | Level 2 | ||||||||||
Assets: | |||||||||||
Money market and deposit accounts | $ | $ | $ | ||||||||
Publicly traded equity securities | |||||||||||
Certificates of deposit | |||||||||||
Derivative instruments (1) | |||||||||||
Total | $ | $ | $ | ||||||||
Liabilities: | |||||||||||
Derivative instruments (1) | $ | $ | $ |
(1) | Amounts are included within other current assets, other assets, other current liabilities and other liabilities in the Company's accompanying condensed consolidated balance sheet. |
Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | ||||||
Finance lease cost | |||||||
Amortization of right-of-use assets (1) | $ | $ | |||||
Interest on lease liabilities | |||||||
Total finance lease cost | |||||||
Operating lease cost | |||||||
Total lease cost | $ | $ |
Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | ||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||
Operating cash flows from finance leases | $ | $ | |||||
Operating cash flows from operating leases | |||||||
Financing cash flows from finance leases | |||||||
Right-of-use assets obtained in exchange for lease obligations: (1) | |||||||
Finance leases | $ | $ | |||||
Operating leases | |||||||
As of March 31, 2020 | As of December 31, 2019 | ||||||
Weighted-average remaining lease term - finance leases (2) | |||||||
Weighted-average remaining lease term - operating leases (2) | |||||||
Weighted-average discount rate - finance leases | % | % | |||||
Weighted-average discount rate - operating leases | % | % | |||||
Finance lease assets (3) | $ | $ |
Operating Leases | Finance Leases | Total | |||||||||
2020 (9 months remaining) | $ | $ | $ | ||||||||
2021 | |||||||||||
2022 | |||||||||||
2023 | |||||||||||
2024 | |||||||||||
Thereafter | |||||||||||
Total lease payments | |||||||||||
Plus amount representing residual property value | |||||||||||
Less imputed interest | ( | ) | ( | ) | ( | ) | |||||
Total | $ | $ | $ |
March 31, 2020 | December 31, 2019 | ||||||
Term loans | $ | $ | |||||
Revolving credit facility | |||||||
Mortgage payable and loans payable | |||||||
Less amount representing unamortized debt discount and debt issuance cost | ( | ) | ( | ) | |||
Add amount representing unamortized mortgage premium | |||||||
Less current portion | ( | ) | ( | ) | |||
Total | $ | $ |
March 31, 2020 | December 31, 2019 | ||||||||||||
Amount | Effective Rate | Amount | Effective Rate | ||||||||||
5.000% Infomart Senior Notes (1) | $ | % | $ | % | |||||||||
5.375% Senior Notes due 2022 | % | % | |||||||||||
2.625% Senior Notes due 2024 | % | % | |||||||||||
2.875% Euro Senior Notes due 2024 | % | % | |||||||||||
2.875% Euro Senior Notes due 2025 | % | % | |||||||||||
2.900% Senior Notes due 2026 | % | % | |||||||||||
5.875% Senior Notes due 2026 | % | % | |||||||||||
2.875% Euro Senior Notes due 2026 | % | % | |||||||||||
5.375% Senior Notes due 2027 | % | % | |||||||||||
3.200% Senior Notes due 2029 | % | % | |||||||||||
Less amount representing unamortized debt issuance cost | ( | ) | ( | ) | |||||||||
Add amount representing unamortized debt premium | |||||||||||||
Less current portion | ( | ) | ( | ) | |||||||||
Total | $ | $ |
Years ending: | |||
2020 (9 months remaining) | $ | ||
2021 | |||
2022 | |||
2023 | |||
2024 | |||
Thereafter | |||
Total | $ |
March 31, 2020 | December 31, 2019 | ||||||
Mortgage and loans payable | $ | $ | |||||
Senior notes |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Interest expense | $ | $ | |||||
Interest capitalized | |||||||
Interest charges incurred | $ | $ |
AOCI (Loss) | Retained Earnings | Equinix Stockholders' Equity | Non-controlling Interests | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Dividends | ||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||
Adjustment from adoption of new accounting standard update | — | — | — | — | — | — | — | ( | ) | ( | ) | — | ( | ) | |||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | ( | ) | — | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
Issuance of common stock and release of treasury stock for employee equity awards | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of common stock under ATM Program | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Dividend distribution on common stock, $2.66 per share | — | — | — | — | — | ( | ) | — | — | ( | ) | — | ( | ) | |||||||||||||||||||||||||||
Settlement of accrued dividends on vested equity awards | — | — | — | — | ( | ) | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||||||||||
Accrued dividends on unvested equity awards | — | — | — | — | — | ( | ) | — | — | ( | ) | — | ( | ) | |||||||||||||||||||||||||||
Stock-based compensation, net of estimated forfeitures | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Balance as of March 31, 2020 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ( | ) | $ |
Additional Paid-in Capital | Accumulated Dividends | AOCI (Loss) | Retained Earnings | Equinix Stockholders' Equity | Non-controlling interests | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | ||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2018 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | $ | ||||||||||||||||||||||||
Adjustment from adoption of new accounting standard update | — | — | — | — | — | — | ( | ) | ( | ) | — | ( | ) | ||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | — | — | ( | ) | ||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Issuance of common stock and release of treasury stock for employee equity awards | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Issuance of common stock for equity offering | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Dividend distribution on common stock, $2.46 per share | — | — | — | — | — | ( | ) | — | — | ( | ) | — | ( | ) | |||||||||||||||||||||||||||
Settlement of accrued dividends on vested equity awards | — | — | — | — | ( | ) | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||||||||||
Accrued dividends on unvested equity awards | — | — | — | — | — | ( | ) | — | — | ( | ) | — | ( | ) | |||||||||||||||||||||||||||
Stock-based compensation, net of estimated forfeitures | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Balance as of March 31, 2019 | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ( | ) | $ |
Balance as of December 31, 2019 | Net Change | Balance as of March 31, 2020 | |||||||||
Foreign currency translation adjustment ("CTA") loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||
Unrealized gain on cash flow hedges (1) | ( | ) | |||||||||
Net investment hedge CTA gain (1) | |||||||||||
Net actuarial loss on defined benefit plans (2) | ( | ) | ( | ) | |||||||
Accumulated other comprehensive loss attributable to Equinix | $ | ( | ) | $ | ( | ) | $ | ( | ) |
(1) | Refer to Note 6 for a discussion of the amounts reclassified from accumulated other comprehensive loss to net income. |
(2) | The Company has a defined benefit pension plan covering all employees in one country where such plan is mandated by law. The Company does not have any defined benefit plans in any other countries. The unamortized gain (loss) on defined benefit plans includes gains or losses resulting from a change in the value of either the projected benefit obligation or the plan assets resulting from a change in an actuarial assumption, net of amortization. |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Cost of revenues | $ | $ | |||||
Sales and marketing | |||||||
General and administrative | |||||||
Total | $ | $ |
Three Months Ended March 31, 2020 | |||||||||||||||
Americas | EMEA | Asia-Pacific | Total | ||||||||||||
Colocation (1) | $ | $ | $ | $ | |||||||||||
Interconnection | |||||||||||||||
Managed infrastructure | |||||||||||||||
Other (1) | |||||||||||||||
Recurring revenues | |||||||||||||||
Non-recurring revenues | |||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended March 31, 2019 | |||||||||||||||
Americas | EMEA | Asia-Pacific | Total | ||||||||||||
Colocation (1) | $ | $ | $ | $ | |||||||||||
Interconnection | |||||||||||||||
Managed infrastructure | |||||||||||||||
Other (1) | |||||||||||||||
Recurring revenues | |||||||||||||||
Non-recurring revenues | |||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Adjusted EBITDA: | |||||||
Americas | $ | $ | |||||
EMEA | |||||||
Asia-Pacific | |||||||
Total adjusted EBITDA | |||||||
Depreciation, amortization and accretion expense | ( | ) | ( | ) | |||
Stock-based compensation expense | ( | ) | ( | ) | |||
Impairment charges | ( | ) | |||||
Transaction costs | ( | ) | ( | ) | |||
Loss on asset sales | ( | ) | |||||
Income from operations | $ | $ |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Depreciation and amortization: | |||||||
Americas | $ | $ | |||||
EMEA | |||||||
Asia-Pacific | |||||||
Total | $ | $ | |||||
Capital expenditures: | |||||||
Americas | $ | $ | |||||
EMEA | |||||||
Asia-Pacific | |||||||
Total | $ | $ |
March 31, 2020 | December 31, 2019 | ||||||
Americas | $ | $ | |||||
EMEA | |||||||
Asia-Pacific | |||||||
Total Property, plant and equipment, net | $ | $ | |||||
Americas | $ | $ | |||||
EMEA | |||||||
Asia-Pacific | |||||||
Total Operating lease right-of-use assets | $ | $ |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
• | Overview |
• | Results of Operations |
• | Non-GAAP Financial Measures |
• | Liquidity and Capital Resources |
• | Contractual Obligations and Off-Balance-Sheet Arrangements |
• | Critical Accounting Policies and Estimates |
• | Recent Accounting Pronouncements |
• | premium data center colocation; |
• | interconnection and data exchange solutions; |
• | edge services for deploying networking, security and hardware; and |
• | remote expert support and professional services. |
• | In January, we redeemed the remaining $343.7 million principal amount of the 5.375% Senior Notes due 2022. See Note 9 within the Condensed Consolidated Financial Statements. |
• | In January, we completed the acquisition of three data centers in Mexico from Axtel S.A.B. de C.V. (“Axtel”) for a total purchase consideration of approximately $189.0 million. See Note 4 within the Condensed Consolidated Financial Statements. |
• | In March, we completed the acquisition of Packet Host, Inc. (“Packet”), a leading bare metal automation platform for a total cash purchase price of approximately $290.3 million. See Note 4 within the Condensed Consolidated Financial Statements. |
• | In March 2020, we borrowed a total of $250.0 million under our Revolving Facility. As of March 31, 2020, we had an additional $1.7 billion available for borrowing under our Revolving Facility. In May, we repaid the $250.0 million outstanding under our Revolving Facility. As a result, the amount available to borrow under the Revolving Facility was approximately $1.9 billion after the repayment. See Note 9 and Note 13 within the Condensed Consolidated Financial Statements. |
• | During the three months ended March 31, 2020, we sold 162,530 shares of common stock for approximately $101.8 million in proceeds, net of payment of commissions to the sales agents, under our ATM program. See Note 11 within the Condensed Consolidated Financial Statements. |
• | In April, we entered into a credit agreement which provides for senior unsecured 364-day term loan facilities in an aggregate principal amount of $750.0 million. On April 15, 2020, we borrowed $391.0 million, as well as €100.0 million or $109.8 million at the exchange rate in effect on that date. See Note 13 within the Condensed Consolidated Financial Statements. |
• | In April, we entered into an agreement to form a second joint venture in the form of a limited liability partnership with GIC to develop and operate xScale data centers in Asia-Pacific (the “Asia-Pacific Joint Venture”). See Note 13 within the Condensed Consolidated Financial Statements. |
Three Months Ended March 31, | % Change | ||||||||||||||||||
2020 | % | 2019 | % | Actual | Constant Currency | ||||||||||||||
Americas: | |||||||||||||||||||
Recurring revenues | $ | 632,632 | 44 | % | $ | 606,310 | 44 | % | 4 | % | 6 | % | |||||||
Non-recurring revenues | 29,273 | 2 | % | 38,056 | 3 | % | (23 | )% | (22 | )% | |||||||||
661,905 | 46 | % | 644,366 | 47 | % | 3 | % | 4 | % | ||||||||||
EMEA: | |||||||||||||||||||
Recurring revenues | 443,474 | 31 | % | 400,237 | 29 | % | 11 | % | 11 | % | |||||||||
Non-recurring revenues | 35,435 | 2 | % | 34,423 | 3 | % | 3 | % | 6 | % | |||||||||
478,909 | 33 | % | 434,660 | 32 | % | 10 | % | 11 | % | ||||||||||
Asia-Pacific: | |||||||||||||||||||
Recurring revenues | 285,588 | 20 | % | 268,281 | 20 | % | 6 | % | 8 | % | |||||||||
Non-recurring revenues | 18,140 | 1 | % | 15,911 | 1 | % | 14 | % | 17 | % | |||||||||
303,728 | 21 | % | 284,192 | 21 | % | 7 | % | 9 | % | ||||||||||
Total: | |||||||||||||||||||
Recurring revenues | 1,361,694 | 95 | % | 1,274,828 | 93 | % | 7 | % | 8 | % | |||||||||
Non-recurring revenues | 82,848 | 5 | % | 88,390 | 7 | % | (6 | )% | (4 | )% | |||||||||
$ | 1,444,542 | 100 | % | $ | 1,363,218 | 100 | % | 6 | % | 7 | % |
• | approximately $8.1 million of incremental revenues from the Packet and Axtel acquisitions; |
• | $7.0 million of incremental revenues generated from our recently-opened IBX data centers or IBX data center expansions; and |
• | an increase in orders from both our existing customers and new customers during the period. |
• | $8.8 million of lower non-recurring revenues, primarily due to a decrease in equipment resale activities. |
• | approximately $22.7 million of incremental revenues generated from our recently-opened IBX data centers or IBX data center expansions; |
• | an increase in orders from both our existing customers and new customers during the period; and |
• | a net increase of $10.8 million of realized cash flow hedge gains from foreign currency forward contracts. |
• | approximately $7.9 million of incremental revenues generated from our recently-opened IBX data centers or IBX data center expansions; and |
• | an increase in orders from both our existing customers and new customers during the period. |
Three Months Ended March 31, | % Change | ||||||||||||||||||
2020 | % | 2019 | % | Actual | Constant Currency | ||||||||||||||
Americas | $ | 295,112 | 40 | % | $ | 285,659 | 42 | % | 3 | % | 5 | % | |||||||
EMEA | 267,662 | 36 | % | 242,454 | 35 | % | 10 | % | 11 | % | |||||||||
Asia-Pacific | 173,508 | 24 | % | 153,917 | 23 | % | 13 | % | 15 | % | |||||||||
Total | $ | 736,282 | 100 | % | $ | 682,030 | 100 | % | 8 | % | 9 | % |
• | approximately $8.5 million of incremental cost of revenues from the Packet and Axtel acquisitions; and |
• | $6.1 million of higher compensation costs, including salaries, bonuses and stock-based compensation, primarily due to headcount growth and additional bonuses paid to IBX employees for supporting our business during the COVID-19 pandemic. |
• | $5.2 million of lower costs from decreased equipment resale activities, primarily in the U.S. |
• | $10.8 million of higher depreciation expenses driven by IBX data center expansions in London and Frankfurt; |
• | $6.6 million of higher compensation costs, including salaries, bonuses and stock-based compensation, primarily due to headcount growth and additional bonuses to IBX employees for supporting our business during the COVID-19 pandemic; |
• | $6.0 million of higher utilities costs driven by increased utility usage to support IBX data center expansions and utility price increases, primarily in Germany, France and the Netherlands; |
• | a net increase of $4.2 million of realized cash flow hedge losses from foreign currency forward contracts; and |
• | $3.9 million of higher rent and facilities costs and repairs and maintenance expense. |
• | $6.9 million of lower costs from decreased equipment resale activities, primarily in Germany and Sweden. |
• | $10.5 million of higher depreciation expense, primarily from IBX data center expansions in Singapore, Japan, and Australia; |
• | $3.8 million of higher utilities costs and rent and facility costs, primarily driven by expansions and higher utility usage in Hong Kong and Singapore; and |
• | $3.3 million of higher compensation costs, including salaries, bonuses and stock-based compensation, primarily due to headcount growth and additional bonuses to IBX employees for supporting our business during the COVID-19 pandemic. |
Three Months Ended March 31, | % Change | ||||||||||||||||||
2020 | % | 2019 | % | Actual | Constant Currency | ||||||||||||||
Americas | $ | 113,282 | 63 | % | $ | 105,038 | 62 | % | 8 | % | 9 | % | |||||||
EMEA | 42,975 | 24 | % | 41,202 | 24 | % | 4 | % | 6 | % | |||||||||
Asia-Pacific | 24,193 | 13 | % | 23,475 | 14 | % | 3 | % | 5 | % | |||||||||
Total | $ | 180,450 | 100 | % | $ | 169,715 | 100 | % | 6 | % | 7 | % |
• | $6.7 million of higher compensation costs, including sales compensation, salaries and stock-based compensation, primarily due to additional stock-based compensation expenses incurred related to the Packet acquisition and headcount growth; and |
• | $3.4 million of higher advertising and promotions expenses. |
• | $1.0 million of lower travel and entertainment expenses. |
Three Months Ended March 31, | % Change | ||||||||||||||||||
2020 | % | 2019 | % | Actual | Constant Currency | ||||||||||||||
Americas | $ | 194,026 | 74 | % | $ | 147,138 | 69 | % | 32 | % | 33 | % | |||||||
EMEA | 41,856 | 16 | % | 45,342 | 21 | % | (8 | )% | (9 | )% | |||||||||
Asia-Pacific | 25,715 | 10 | % | 22,566 | 10 | % | 14 | % | 16 | % | |||||||||
Total | $ | 261,597 | 100 | % | $ | 215,046 | 100 | % | 22 | % | 22 | % |
• | $29.2 million of higher compensation costs, including salaries, bonuses and stock-based compensation, primarily due to additional stock-based compensation expense incurred related to the Packet acquisition, higher payroll taxes, higher corporate bonus payment and overall headcount growth; |
• | $6.1 million of higher consulting expenses in support of our business growth; |
• | $4.5 million of higher office expenses due to additional software and support services; and |
• | $3.6 million of higher depreciation expense associated with the implementation of certain systems to support the integration and growth of our business. |
• | a net decrease of $6.4 million in other operating expenses due to the favorable determination of a legal claim. |
• | $2.1 million of higher compensation costs, including salaries, bonuses and stock-based compensation, primarily due to headcount growth. |
• | $2.7 million of higher compensation costs, including salaries, bonuses and stock-based compensation, primarily due to headcount growth. |
Three Months Ended March 31, | % Change | ||||||||||||||||||
2020 | % | 2019 | % | Actual | Constant Currency | ||||||||||||||
Americas | $ | 47,308 | 19 | % | $ | 90,011 | 32 | % | (47 | )% | (46 | )% | |||||||
EMEA | 126,004 | 50 | % | 105,007 | 38 | % | 20 | % | 19 | % | |||||||||
Asia-Pacific | 80,172 | 31 | % | 84,490 | 30 | % | (5 | )% | (3 | )% | |||||||||
Total | $ | 253,484 | 100 | % | $ | 279,508 | 100 | % | (9 | )% | (9 | )% |
Three Months Ended March 31, | % Change | ||||||||||||||||||
2020 | % | 2019 | % | Actual | Constant Currency | ||||||||||||||
Americas | $ | 293,613 | 43 | % | $ | 307,838 | 47 | % | (5 | )% | (4 | )% | |||||||
EMEA | 230,158 | 34 | % | 199,072 | 30 | % | 16 | % | 16 | % | |||||||||
Asia-Pacific | 160,439 | 23 | % | 153,245 | 23 | % | 5 | % | 7 | % | |||||||||
Total | $ | 684,210 | 100 | % | $ | 660,155 | 100 | % | 4 | % | 5 | % |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Income from operations | $ | 253,484 | $ | 279,508 | |||
Depreciation, amortization, and accretion expense | 337,431 | 314,705 | |||||
Stock-based compensation expense | 80,566 | 49,023 | |||||
Transaction costs | 11,530 | 2,471 | |||||
Impairment charges | — | 14,448 | |||||
Loss on asset sales | 1,199 | — | |||||
Adjusted EBITDA | $ | 684,210 | $ | 660,155 |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Net income | $ | 118,957 | $ | 117,747 | |||
Net (income) loss attributable to non-controlling interests | (165 | ) | 331 | ||||
Net income attributable to Equinix | 118,792 | 118,078 | |||||
Adjustments: | |||||||
Real estate depreciation | 221,787 | 205,649 | |||||
Loss on disposition of real estate property | 2,506 | 2,346 | |||||
Adjustments for FFO from unconsolidated joint ventures | 669 | — | |||||
FFO attributable to common shareholders | $ | 343,754 | $ | 326,073 | |||
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
FFO attributable to common shareholders | $ | 343,754 | $ | 326,073 | |||
Adjustments: | |||||||
Installation revenue adjustment | (3,481 | ) | 1,029 | ||||
Straight-line rent expense adjustment | 1,806 | 2,378 | |||||
Contract cost adjustment | (10,434 | ) | (6,778 | ) | |||
Amortization of deferred financing costs and debt discounts and premiums | 3,460 | 2,995 | |||||
Stock-based compensation expense | 80,566 | 49,023 | |||||
Non-real estate depreciation expense | 65,591 | 57,994 | |||||
Amortization expense | 48,491 | 49,535 | |||||
Accretion expense | 1,562 | 1,527 | |||||
Recurring capital expenditures | (17,868 | ) | (20,947 | ) | |||
Loss on debt extinguishment | 6,441 | 382 | |||||
Transaction costs | 11,530 | 2,471 | |||||
Impairment charges | — | 14,448 | |||||
Income tax expense adjustment | 2,833 | 7,990 | |||||
Adjustments for AFFO from unconsolidated joint ventures | 454 | — | |||||
AFFO attributable to common shareholders | $ | 534,705 | $ | 488,120 |
• | $8,626.1 million of principal from our senior notes; |
• | Approximately $1,579.2 million from our finance lease liabilities; and |
• | $1,548.0 million of principal from our mortgage and loans payable, including borrowings under our revolving credit facility (gross of debt issuance cost, debt discount, plus mortgage premium). |
• | Issued and sold 162,530 shares of common stock under our ATM Program, for proceeds of approximately $101.8 million, net of payment of commissions and other offering expenses; |
• | Borrowed $250.0 million under our revolving credit facility; and |
• | Redeemed the remaining $343.7 million principal amount of our 5.375% Senior Notes due 2022. |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
(dollars in thousands) | |||||||
Net cash provided by operating activities | $ | 516,830 | $ | 421,141 | |||
Net cash used in investing activities | (954,541 | ) | (378,467 | ) | |||
Net cash provided by (used in) financing activities | (237,104 | ) | 986,932 |
• | borrowing under the revolving credit facility of $250.0 million; |
• | the sale of 162,530 shares of common stock under the ATM Program, for net proceeds of $101.8 million; and |
• | proceeds from the employee stock purchase plan of $30.4 million. |
• | dividend distributions of $233.5 million; |
• | the repayment of senior notes of $343.7 million; |
• | repayments of finance lease liabilities of $19.0 million; and |
• | repayments of mortgage and loans payable of $18.5 million. |
• | the sale of 2,985,575 shares of common stock in a public equity offering for net proceeds of approximately $1,213.4 million; and |
• | proceeds from employee awards of $27.6 million. |
• | dividend distributions of $204.6 million; |
• | repayments of finance lease liabilities of $31.2 million; and |
• | repayments of mortgage and loans payable of $18.3 million. |
2020 (9 months remaining) | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | |||||||||||||||||||||
Term loans and other loans payable (1) | $ | 55,962 | $ | 74,507 | $ | 1,383,505 | $ | 6,357 | $ | 5,874 | $ | 21,792 | $ | 1,547,997 | |||||||||||||
Senior notes (1) | 300,000 | 150,000 | — | — | 1,825,300 | 6,350,800 | 8,626,100 | ||||||||||||||||||||
Interest (2) | 265,567 | 330,058 | 324,461 | 301,927 | 289,944 | 572,901 | 2,084,858 | ||||||||||||||||||||
Finance leases (3) | 141,162 | 191,679 | 188,362 | 183,177 | 181,116 | 1,796,773 | 2,682,269 | ||||||||||||||||||||
Operating leases (3) | 137,567 | 190,031 | 182,747 | 167,266 | 155,392 | 1,080,313 | 1,913,316 | ||||||||||||||||||||
Other contractual commitments (4) | 1,276,909 | 272,609 | 100,964 | 51,312 | 37,795 | 282,785 | 2,022,374 | ||||||||||||||||||||
Asset retirement obligations (5) | 2,074 | 4,026 | 12,777 | 5,449 | 7,035 | 72,117 | 103,478 | ||||||||||||||||||||
$ | 2,179,241 | $ | 1,212,910 | $ | 2,192,816 | $ | 715,488 | $ | 2,502,456 | $ | 10,177,481 | $ | 18,980,392 |
(1) | Represents principal and unamortized mortgage premium only. |
(2) | Represents interest on mortgage payable, loans payable, senior notes and term loans based on their respective interest rates as of March 31, 2020, as well as the credit facility fee for the revolving credit facility. |
(3) | Represents lease payments under finance and operating lease arrangements, including renewal options that are certain to be exercised. |
(4) | Represents off-balance sheet arrangements. Other contractual commitments are described below. |
(5) | Represents liability, net of future accretion expense. |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
• | construction delays; |
• | lack of availability and delays for data center equipment, including items such as generators and switchgear; |
• | unexpected budget changes; |
• | increased prices for and delays in obtaining building supplies, raw materials and data center equipment; |
• | labor availability, labor disputes and work stoppages with contractors, subcontractors and other third parties, including interruptions in work due to the COVID-19 pandemic; |
• | unanticipated environmental issues and geological problems; |
• | delays related to permitting from public agencies and utility companies; and |
• | delays in site readiness leading to our failure to meet commitments made to customers planning to expand into a new build. |
• | the possible disruption of our ongoing business and diversion of management's attention by acquisition, transition and integration activities, particularly when multiple acquisitions and integrations are occurring at the same time; |
• | our potential inability to successfully pursue or realize some or all of the anticipated revenue opportunities associated with an acquisition or investment; |
• | the possibility that we may not be able to successfully integrate acquired businesses, or businesses in which we invest, or achieve anticipated operating efficiencies or cost savings; |
• | the possibility that announced acquisitions may not be completed, due to failure to satisfy the conditions to closing as a result of: |
◦ | an injunction, law or order that makes unlawful the consummation of the acquisition; |
◦ | inaccuracy or breach of the representations and warranties of, or the non-compliance with covenants by, either party; |
◦ | the nonreceipt of closing documents; or |
◦ | for other reasons; |
• | the possibility that there could be a delay in the completion of an acquisition, which could, among other things, result in additional transaction costs, loss of revenue or other negative effects resulting from uncertainty about completion of the respective acquisition; |
• | the dilution of our existing stockholders as a result of our issuing stock as consideration in a transaction or selling stock in order to fund the transaction; |
• | the possibility of customer dissatisfaction if we are unable to achieve levels of quality and stability on par with past practices; |
• | the possibility that we will be unable to retain relationships with key customers, landlords and/or suppliers of the acquired businesses, some of which may terminate their contracts with the acquired business as a result of the acquisition or which may attempt to negotiate changes in their current or future business relationships with us; |
• | the possibility that we could lose key employees from the acquired businesses before integrating them; |
• | the possibility that we may be unable to integrate or migrate IT systems, which could create a risk of errors or performance problems and could affect our ability to meet customer service level obligations; |
• | the potential deterioration in our ability to access credit markets due to increased leverage; |
• | the possibility that our customers may not accept either the existing equipment infrastructure or the "look-and-feel" of a new or different IBX data center; |
• | the possibility that additional capital expenditures may be required or that transaction expenses associated with acquisitions may be higher than anticipated; |
• | the possibility that required financing to fund an acquisition may not be available on acceptable terms or at all; |
• | the possibility that we may be unable to obtain required approvals from governmental authorities under antitrust and competition laws on a timely basis or at all, which could, among other things, delay or prevent us from completing an acquisition, limit our ability to realize the expected financial or strategic benefits of an acquisition or have other adverse effects on our current business and operations; |
• | the possible loss or reduction in value of acquired businesses; |
• | the possibility that future acquisitions may present new complexities in deal structure, related complex accounting and coordination with new partners, particularly in light of our desire to maintain our qualification for taxation as a REIT; |
• | the possibility that we may not be able to prepare and issue our financial statements and other public filings in a timely and accurate manner, and/or maintain an effective control environment, due to the strain on the finance organization when multiple acquisitions and integrations are occurring at the same time; |
• | the possibility that future acquisitions may trigger property tax reassessments resulting in a substantial increase to our property taxes beyond that which we anticipated; |
• | the possibility that future acquisitions may be in geographies and regulatory environments to which we are unaccustomed and we may become subject to complex requirements and risks with which we have limited experience; |
• | the possibility that carriers may find it cost-prohibitive or impractical to bring fiber and networks into a new IBX data center; |
• | the possibility of litigation or other claims in connection with, or as a result of, an acquisition, including claims from terminated employees, customers, former stockholders or other third parties; |
• | the possibility that asset divestments may be required in order to obtain regulatory clearance for a transaction; |
• | the possibility of pre-existing undisclosed liabilities, including, but not limited to, lease or landlord related liability, tax liability, environmental liability or asbestos liability, for which insurance coverage may be insufficient or unavailable, or other issues not discovered in the diligence process; and |
• | the possibility that we receive limited or incorrect information about the acquired business in the diligence process, particularly in light of the travel bans and other restrictions imposed due to COVID-19. Additionally, we sometimes do not receive all of the customer contracts associated with our acquisitions in the diligence process, which affects our visibility into customer termination rights and could expose us to additional liabilities. |
• | certain financing conditions, including the fulfilment by each of Equinix and GIC of their funding obligations and obtaining certain external financing arrangements; |
• | completion of pre-closing reorganization; and |
• | obtaining required regulatory approvals. |
• | we may not have the right to exercise sole decision-making authority regarding the properties, partnership, joint venture or other entity; |
• | if our partners become bankrupt or fail to fund their share of required capital contributions, we may choose to or be required to contribute such capital; |
• | our partners may have economic, tax or other business interests or goals which are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives; |
• | our joint venture partners may take actions that are not within our control, which could require us to dispose of the joint venture asset, transfer it to a TRS in order for Equinix to maintain its qualification for taxation as a REIT, or purchase the partner's interests or assets at an above-market price; |
• | our joint venture partners may take actions unrelated to our business agreement but which reflect poorly on Equinix because of our joint venture; |
• | disputes between us and our partners may result in litigation or arbitration that would increase our expenses and prevent our management from focusing their time and effort on our day-to-day business; and |
• | we may in certain circumstances be liable for the actions of our third-party partners or guarantee all or a portion of the joint venture's liabilities, which may require the company to pay an amount greater than its investment in the joint venture. |
• | require us to dedicate a substantial portion of our cash flow from operations to make interest and principal payments on our debt and in respect of other off-balance sheet arrangements, reducing the availability of our |
• | increase the likelihood of negative outlook from our credit rating agencies, or of a downgrade to our current rating; |
• | make it more difficult for us to satisfy our obligations under our various debt instruments; |
• | increase our cost of borrowing and even limit our ability to access additional debt to fund future growth; |
• | increase our vulnerability to general adverse economic and industry conditions and adverse changes in governmental regulations; |
• | limit our flexibility in planning for, or reacting to, changes in our business and industry, which may place us at a competitive disadvantage compared with our competitors; |
• | limit our operating flexibility through covenants with which we must comply; |
• | limit our ability to borrow additional funds, even when necessary to maintain adequate liquidity, which would also limit our ability to further expand our business; and |
• | make us more vulnerable to increases in interest rates because of the variable interest rates on some of our borrowings to the extent we have not entirely hedged such variable rate debt. |
• | the costs of customizing IBX data centers for foreign countries; |
• | protectionist laws and business practices favoring local competition; |
• | greater difficulty or delay in accounts receivable collection; |
• | difficulties in staffing and managing foreign operations, including negotiating with foreign labor unions or workers' councils; |
• | difficulties in managing across cultures and in foreign languages; |
• | political and economic instability; |
• | fluctuations in currency exchange rates; |
• | difficulties in repatriating funds from certain countries; |
• | our ability to obtain, transfer or maintain licenses required by governmental entities with respect to our business; |
• | unexpected changes in regulatory, tax and political environments such as the United Kingdom's withdrawal from the European Union ("Brexit"); |
• | our ability to secure and maintain the necessary physical and telecommunications infrastructure; |
• | compliance with anti-bribery and corruption laws; |
• | compliance with economic and trade sanctions enforced by the Office of Foreign Assets Control of the U.S. Department of Treasury; |
• | compliance with evolving governmental regulation with which we have little experience; and |
• | compliance with evolving and varied regulations related to the COVID-19 pandemic. |
• | news or regulations regarding the COVID-19 pandemic; |
• | our operating results or forecasts; |
• | new issuances of equity, debt or convertible debt by us, including issuances through our ATM Program; |
• | increases in market interest rates and changes in other general market and economic conditions, including inflationary concerns; |
• | changes to our capital allocation, tax planning or business strategy; |
• | our qualification for taxation as a REIT and our declaration of distributions to our stockholders; |
• | changes in U.S. or foreign tax laws; |
• | changes in management or key personnel; |
• | developments in our relationships with customers; |
• | announcements by our customers or competitors; |
• | changes in regulatory policy or interpretation; |
• | governmental investigations; |
• | changes in the ratings of our debt or stock by rating agencies or securities analysts; |
• | our purchase or development of real estate and/or additional IBX data centers; |
• | our acquisitions of complementary businesses; or |
• | the operational performance of our IBX data centers. |
• | human error; |
• | equipment failure; |
• | physical, electronic and cyber security breaches; |
• | fire, earthquake, hurricane, flood, tornado and other natural disasters; |
• | extreme temperatures; |
• | water damage; |
• | fiber cuts; |
• | power loss; |
• | terrorist acts; |
• | sabotage and vandalism; |
• | global pandemics such as the COVID-19 pandemic; and |
• | failure of business partners who provide our resale products. |
• | fluctuations of foreign currencies in the markets in which we operate; |
• | the timing and magnitude of depreciation and interest expense or other expenses related to the acquisition, purchase or construction of additional IBX data centers or the upgrade of existing IBX data centers; |
• | demand for space, power and solutions at our IBX data centers; |
• | changes in general economic conditions, such as from the COVID-19 pandemic or other economic downturns, or specific market conditions in the telecommunications and internet industries, any of which could have a material impact on us or on our customer base; |
• | charges to earnings resulting from past acquisitions due to, among other things, impairment of goodwill or intangible assets, reduction in the useful lives of intangible assets acquired, identification of additional assumed contingent liabilities or revised estimates to restructure an acquired company's operations; |
• | the duration of the sales cycle for our offerings and our ability to ramp our newly-hired sales persons to full productivity within the time period we have forecasted; |
• | additions and changes in product offerings and our ability to ramp up and integrate new products within the time period we have forecasted; |
• | restructuring charges or reversals of restructuring charges, which may be necessary due to revised sublease assumptions, changes in strategy or otherwise; |
• | acquisitions or dispositions we may make; |
• | the financial condition and credit risk of our customers; |
• | the provision of customer discounts and credits; |
• | the mix of current and proposed products and offerings and the gross margins associated with our products and offerings; |
• | the timing required for new and future IBX data centers to open or become fully utilized; |
• | competition in the markets in which we operate; |
• | conditions related to international operations; |
• | increasing repair and maintenance expenses in connection with aging IBX data centers; |
• | lack of available capacity in our existing IBX data centers to generate new revenue or delays in opening new or acquired IBX data centers that delay our ability to generate new revenue in markets which have otherwise reached capacity; |
• | changes in rent expense as we amend our IBX data center leases in connection with extending their lease terms when their initial lease term expiration dates approach or changes in shared operating costs in connection with our leases, which are commonly referred to as common area maintenance expenses; |
• | the timing and magnitude of other operating expenses, including taxes, expenses related to the expansion of sales, marketing, operations and acquisitions, if any, of complementary businesses and assets; |
• | the cost and availability of adequate public utilities, including electricity; |
• | changes in employee stock-based compensation; |
• | overall inflation; |
• | increasing interest expense due to any increases in interest rates and/or potential additional debt financings; |
• | changes in our tax planning strategies or failure to realize anticipated benefits from such strategies; |
• | changes in income tax benefit or expense; and |
• | changes in or new GAAP as periodically released by the Financial Accounting Standards Board ("FASB"). |
• | ownership limitations and transfer restrictions relating to our stock that are intended to facilitate our compliance with certain REIT rules relating to share ownership; |
• | authorization for the issuance of "blank check" preferred stock; |
• | the prohibition of cumulative voting in the election of directors; |
• | limits on the persons who may call special meetings of stockholders; |
• | limits on stockholder action by written consent; and |
• | advance notice requirements for nominations to the Board of Directors or for proposing matters that can be acted on by stockholders at stockholder meetings. |
• | we will not be allowed a deduction for distributions to stockholders in computing our taxable income; |
• | we will be subject to U.S. federal and state income tax on our taxable income at regular corporate income tax rates; and |
• | we would not be eligible to elect REIT status again until the fifth taxable year that begins after the first year for which we failed to qualify for taxation as a REIT. |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults Upon Senior Securities |
Item 4. | Mine Safety Disclosure |
Item 5. | Other Information |
Item 6. | Exhibits |
Incorporated by Reference | ||||||||||
Exhibit Number | Exhibit Description | Form | Filing Date/ Period End Date | Exhibit | Filed Herewith | |||||
8-K | 5/29/2015 | 2.1 | ||||||||
8-K | 5/29/2015 | 2.2 | ||||||||
10-K | 12/31/2015 | 2.3 | ||||||||
8-K | 12/6/2016 | 2.1 | ||||||||
10-K | 12/31/2016 | 2.5 | ||||||||
8-K | 5/1/2017 | 2.1 | ||||||||
10-Q | 8/8/2018 | 2.7 | ||||||||
10-K/A | 12/31/2002 | 3.1 | ||||||||
8-K | 6/14/2011 | 3.1 | ||||||||
8-K | 6/11/2013 | 3.1 | ||||||||
10-Q | 6/30/2014 | 3.4 | ||||||||
10-K/A | 12/31/2002 | 3.3 | ||||||||
8-K | 3/29/2016 | 3.1 | ||||||||
4.1 | Reference is made to Exhibits 3.1, 3.2, 3.3, 3.4, 3.5 and 3.6. | |||||||||
8-K | 11/20/2014 | 4.1 | ||||||||
8-K | 11/20/2014 | 4.2 | ||||||||
4.4 | Form of 5.375% Senior Note due 2022 (see Exhibit 4.3). | |||||||||
8-K | 12/4/2015 | 4.2 | ||||||||
4.6 | Form of 5.875% Senior Note due 2026 (see Exhibit 4.5). | |||||||||
8-K | 3/22/2017 | 4.2 | ||||||||
4.8 | Form of 5.375% Senior Notes due 2027 (see Exhibit 4.7). | |||||||||
8-K | 9/20/2017 | 4.2 | ||||||||
4.10 | Form of 2.875% Senior Notes due 2025 (see Exhibit 4.9). | |||||||||
8-K | 12/5/2017 | 4.1 | ||||||||
8-K | 12/5/2017 | 4.2 | ||||||||
4.13 | Form of 2.875% Senior Notes due 2026 (see Exhibit 4.12). | |||||||||
8-K | 3/14/2018 | 4.2 | ||||||||
4.15 | Form of 2.875% Senior Notes due 2024 (see Exhibit 4.14). | |||||||||
8-K | 4/3/2018 | 4.2 | ||||||||
4.17 | Form of 5.00% Senior Notes due April 2020 (see Exhibit 4.16). | |||||||||
4.18 | Form of 5.00% Senior Notes due October 2020 (see Exhibit 4.16). | |||||||||
4.19 | Form of 5.00% Senior Notes due April 2021 (see Exhibit 4.16). | |||||||||
8-K | 11/18/2019 | 4.2 | ||||||||
4.21 | Form of 2.625% Senior Notes due 2024 (See Exhibit 4.20). |
8-K | 11/18/2019 | 4.4 | ||||||||
4.23 | Form of 2.900% Senior Notes due 2026 (See Exhibit 4.22). | |||||||||
8-K | 11/18/2019 | 4.6 | ||||||||
4.25 | Form of 3.200% Senior Notes due 2029 (See Exhibit 4.24) | |||||||||
10-K | 12/31/2014 | 4.13 | ||||||||
10-K | 12/31/2019 | 4.31 | ||||||||
10.1** | S-4 (File No. 333-93749) | 12/29/1999 | 10.5 | |||||||
10.2** | 10-K | 12/31/2016 | 10.2 | |||||||
10.3** | 10-K | 12/31/2016 | 10.3 | |||||||
10.4** | 10-K | 12/31/2016 | 10.4 | |||||||
10.5** | 10-Q | 6/30/2014 | 10.5 | |||||||
10.6** | S-1/A (File No. 333-137607) filed by Switch & Data Facilities Company | 2/5/2007 | 10.9 | |||||||
10.7** | 10-Q | 6/30/2019 | 10.17 | |||||||
10.8** | 10-Q | 3/31/2017 | 10.35 | |||||||
10.9** | 10-Q | 3/31/2017 | 10.36 | |||||||
10.10** | 10-Q | 3/31/2017 | 10.37 | |||||||
10.11** | 10-Q | 3/31/2018 | 10.31 | |||||||
10.12** | 10-Q | 3/31/2018 | 10.32 | |||||||
10.13** | 10-Q | 3/31/2018 | 10.33 | |||||||
10.14** | 10-Q | 3/31/2019 | 10.28 | |||||||
10.15** | 10-Q | 3/31/2019 | 10.29 | |||||||
10.16** | 10-Q | 3/31/2019 | 10.30 | |||||||
10-Q | 6/30/2019 | 10.34 | ||||||||
10.28** | 10-K | 2/22/2019 | 10.37 | |||||||
10.29** | 10-Q | 9/30/2019 | 10.25 | |||||||
10.30** | 10-Q | 9/30/2019 | 10.26 | |||||||
10.31** | 10-Q | 9/30/2019 | 10.27 | |||||||
10.32** | 10-Q | 9/30/2019 | 10.28 | |||||||
10.33** | 10-Q | 9/30/2019 | 10.29 | |||||||
10.34** | 10-Q | 9/30/2019 | 10.30 | |||||||
10.35** | 10-Q | 9/30/2019 | 10.31 | |||||||
10.36** | 10-Q | 9/30/2019 | 10.32 | |||||||
10.37** | 10-Q | 9/30/2019 | 10.33 | |||||||
10.38** | 10-Q | 9/30/2019 | 10.34 | |||||||
10.39** | 10-Q | 9/30/2019 | 10.35 | |||||||
10.40** | 10-Q | 9/30/2019 | 10.36 | |||||||
10.41** | 10-Q | 9/30/2019 | 10.37 | |||||||
10.42** | 10-Q | 9/30/2019 | 10.38 | |||||||
10.43** | 10-Q | 9/30/2019 | 10.39 | |||||||
10.44** | 10-Q | 9/30/2019 | 10.40 | |||||||
X | ||||||||||
X | ||||||||||
X | ||||||||||
X | ||||||||||
X | ||||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | X | ||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | X | ||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | X | ||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | X | ||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | X | ||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | X | ||||||||
104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | X |
EQUINIX, INC. | ||
Date: May 7, 2020 | ||
By: | /s/ KEITH D. TAYLOR | |
Chief Financial Officer | ||
(Principal Financial Officer) |
Exhibit Number | Description of Document | |
10.18** | ||
10.19** | ||
10.20** | ||
10.21** | ||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Document. | |
101.DEF | Inline XBRL Taxonomy Extension Definition Document. | |
101.LAB | Inline XBRL Taxonomy Extension Labels Document. | |
101. PRE | Inline XBRL Taxonomy Extension Presentation Document. | |
104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
• | Revenue |
• | AFFO/Share |
Metric | Weighting | Determination | Threshold | Target/Max | |
Revenue | 50% | Performance | 95% | 100% | |
Payout | 0% | 100% | |||
Metric | Weighting | Determination | Threshold | Target | Max |
AFFO/Share | 50% | Performance | 95% | 100% | 103% |
Payout | 0% | 100% | 140% |
• | with respect to 50% of those units on the date upon which the Board or Committee certifies that the Company has achieved revenue and/or AFFO/Share goals of greater than $_____ million and/or $_____ per share, respectively, for 2020; |
• | with respect to 25% of those units on February 15, 2022; and |
• | with respect to the remaining 25% of those units on February 15, 2023. |
Payment for Shares | No payment is required for the Restricted Stock Units, and any Dividend Equivalents thereon, you receive. |
Vesting | The Restricted Stock Units and any Dividend Equivalents thereon, that you are receiving will vest in accordance with the Vesting Schedule stated in the Notice of Restricted Stock Unit Award for Executives; provided, however, that if your Service terminates due to your death then, if and to the extent Restricted Stock Units, and any Dividend Equivalent thereon, have been earned based on the actual performance results as certified by the Board or Committee based on the matrix set forth on Exhibit A hereto, the portion of the Restricted Stock Units, and any Dividend Equivalents thereon, that would have become vested on the next scheduled vesting date will become vested and the underlying shares (and cash equal to the Dividend Equivalents thereon) will be released to your estate not later than December 31 of the calendar year following your death. |
No additional Restricted Stock Units, or any Dividend Equivalents thereon, vest after your Service has terminated for any reason other than death. It is intended that vesting in the Restricted Stock Units, and any Dividend Equivalents thereon, is commensurate with a full-time work schedule. For possible adjustments that may be made by the Company, see the provision below entitled “Leaves of Absence and Part-Time Work.” | |
Dividend Equivalents | You will be credited with Dividend Equivalents equal to the dividends you would have received if you had been the record owner of the Common Stock underlying the Restricted Stock Units on each dividend record date on or after the Date of Grant and through the date you receive a settlement pursuant to the provision below entitled “Settlement of Units” (the “Dividend Equivalent”). Dividend Equivalents shall be subject to the same terms and conditions as the Restricted Stock Units originally awarded pursuant to this Agreement, and they shall vest (or, if applicable, be forfeited) as if they had been granted at the same time as the original Restricted Stock Unit award. If a dividend on the Common Stock is payable wholly or partially in Common Stock, the Dividend Equivalent representing that portion shall be in the form of additional Restricted Stock Units, credited on a one-for-one basis. If a dividend on the Common Stock is payable wholly or partially in cash, the Dividend Equivalent representing that portion shall be in the form of cash, which will be paid to you, without interest, as described below in the provision “Settlement of Units;” provided, however, that the Committee may, in its discretion, provide that the cash portion of any extraordinary distribution on the Common Stock shall be in the form of additional Restricted Stock Units. If a dividend on the Common Stock is payable wholly or partially in other than cash or Common Stock, the Committee may, in its discretion, provide for such Dividend Equivalents with respect to that portion as it deems appropriate under the circumstances. |
Settlement of Units | Each Restricted Stock Unit, and any Dividend Equivalents thereon, will be settled on the first Trading Day that occurs on or after the day when the Restricted Stock Unit vests. However, each Restricted Stock Unit, and any Dividend Equivalents thereon, must be settled not later than March 15 of the calendar year after the calendar year in which the Restricted Stock Unit vests (or December 31 of such calendar year in the case of your death, as described above in the provision entitled “Vesting”). At the time of settlement, you will receive one share of the Company’s Common Stock for each vested Restricted Stock Unit and an amount of cash, without additional earnings or interest and rounded to the nearest whole cent, equal to (i) the value of any fractional share and (ii) the cash portion of the accumulated Dividend Equivalents applicable to the vested Restricted Stock Units, less any Tax-Related Items withholding. Any cash may be distributed to you directly or may be used to offset the amount of any Tax-Related Items withholding arising from the vesting/settlement of the Restricted Stock Units and any Dividend Equivalents thereon. |
Trading Day | “Trading Day” means a day that satisfies each of the following requirements: The Nasdaq Global Market is open for trading on that day; You are permitted to sell shares of Common Stock on that day without incurring liability under Section 16(b) of the Securities Exchange Act; Either (a) you are not in possession of material non-public information that would make it illegal for you to sell shares of the Company’s Common Stock on that day under Rule 10b-5 of the U.S. Securities and Exchange Commission or (b) you have a trading plan that complies with the requirements of Rule 10b5-1(c)(1) of the Securities Exchange Act that covers the shares underlying the vesting Restricted Stock Units; Under the Company’s Insider Trading Policy, you are permitted to sell shares of Common Stock on that day, and You are not prohibited from selling shares of Common Stock on that day by a written agreement between you and the Company or a third party. |
Change in Control | Except to the extent set forth in the Notice of Restricted Stock Unit Award, in the event of any Change in Control, vesting of the Target Restricted Stock Units, and any Dividend Equivalents thereon, will automatically accelerate in full as described in Article X of the Plan. However, vesting of the Target Restricted Stock Units, and any Dividend Equivalents thereon, will not automatically accelerate if and to the extent the Restricted Stock Units are, in connection with the Change in Control, either to be assumed by the successor corporation (or its parent) or to be replaced with a comparable award for shares of the capital stock of the successor corporation (or its parent). The determination of award comparability will be made by the Committee, and its determination will be final, binding and conclusive. |
In addition, you will vest as to 100% of the unvested Target Restricted Stock Units, and any Dividend Equivalents thereon, if the Company is subject to a Change in Control before your Service terminates, and you are subject to a Qualifying Termination (as defined below) within 12 months after the Change in Control. Notwithstanding the foregoing, any action taken in connection with a Change in Control must either (a) preserve the exemption of the Restricted Stock Units, and any Dividend Equivalents thereon, from Section 409A of the Code or (b) comply with Section 409A of the Code. |
Qualifying Termination | A Qualifying Termination means a Separation (as defined below) resulting from: (a) involuntary discharge for any reason other than Cause (as defined below) within 12 months after a Change in Control; or (b) your voluntary resignation for Good Reason (as defined below), between the date that is four months following a Change in Control and the date that is 12 months following a Change in Control; provided, however, that the grounds for Good Reason may arise at any time within the 12 months following the Change in Control. Cause means your unauthorized use or disclosure of trade secrets that causes material harm to the Company, your conviction of, or a plea of “guilty” or “no contest” to, a felony or your gross misconduct. Good Reason means: (i) a material diminution in your authority, duties or responsibilities; (ii) a material reduction in your level of compensation (including base salary and target bonus) other than pursuant to a Company-wide reduction of compensation where the reduction affects the other executive officers and your reduction is substantially equal, on a percentage basis, to the reduction of the other executive officers; or (iii) a relocation of your place of employment by more than 30 miles, provided and only if such change, reduction or relocation is effected by the Company without your consent1. For vesting to accelerate as a result of a voluntary resignation for Good Reason, all of the following requirements must be satisfied: (1) you must provide notice to the Company of your intent to assert Good Reason within 120 days of the initial existence of one or more of the conditions set forth in (i) through (iii) of the preceding paragraph; (2) the Company will have 30 days from the date of such notice to remedy the condition and, if it does so, you may withdraw your resignation or may resign with no acceleration benefit; and (3) any termination of employment under this provision must occur within 18 months of the initial existence of one or more of the conditions set forth in subclauses (i) through (iii). Should the Company remedy the condition as set forth above and then one or more of the conditions arises again within 12 months following the occurrence of a Change in Control, you may assert Good Reason again subject to all of the conditions set forth herein. Separation means a “separation from service,” as defined in the regulations under Section 409A of the Code. |
1This definition of “Good Reason” is for the CEO, CFO, CLO & CHRO. All other executives have the following definition of “Good Reason”: “Good Reason means: (i) a material diminution in your authority, duties or responsibilities (provided, however, if by virtue of the Company being acquired and made a division or business unit of a larger entity following a Change in Control, you retain substantially similar authority, duties or responsibilities for such division or business unit of the acquiring corporation but not for the entire acquiring corporation, such reduction in authority, duties or responsibilities shall not constitute Good Reason for purposes of this subclause (i)); (ii) a 10% or greater reduction in your level of compensation, which will be determined based on an average of your annual Total Direct Compensation for the prior three calendar years or, if employed for fewer than three calendar years, the number of years you have been employed by the Company (referred to below as the “look-back years”); or (iii) a relocation of your place of employment by more than 30 miles, provided and only if such change, reduction or relocation is effected by the Company without your consent. For purposes of the foregoing, Total Direct Compensation means total target cash compensation (annual base salary plus target annual cash incentives).” | |
Forfeiture | If your Service terminates for any reason, then your Restricted Stock Units, and any Dividend Equivalents thereon, will be forfeited to the extent that they have not vested before the termination date, unless there is vesting acceleration in the event of a Qualifying Termination or in the event of your death. Forfeiture means that the Restricted Stock Units, and any Dividend Equivalents thereon, will immediately revert to the Company. You receive no payment for Restricted Stock Units, and any Dividend Equivalents thereon, that are forfeited. The Committee determines when your Service terminates for this purpose. |
Leaves of Absence and Part-Time Work | For purposes of this Award, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing. But your Service terminates when the approved leave ends, unless you immediately return to active work. If you go on a leave of absence that lasts or is expected to last seven days or longer, then vesting will be suspended during the leave to the extent provided for in the Company’s leave policy. Upon your return to active work (as determined by the Company), vesting will resume; however, unless otherwise provided in the Company’s leave policy, you will not receive credit for any vesting until you work an amount of time equal to the period of your leave. If you and the Company or a subsidiary of the Company agree to a reduction in your scheduled work hours, then the Company reserves the right to modify the rate at which the Restricted Stock Units, and any Dividend Equivalents thereon, vest, so that the rate of vesting is commensurate with your reduced work schedule. Any such adjustment shall be consistent with the Company’s policies for part-time or reduced work schedules or shall be pursuant to the terms of an agreement between you and the Company or a subsidiary of the Company pertaining to your reduced work schedule. The Company shall not be required to adjust any vesting schedule pursuant to this provision. Further, the vesting schedule shall not be adjusted as described in this provision to the extent that the adjustment would cause the Restricted Stock Units to be subject to, or to violate, Section 409A of the Code. |
Settlement / Stock Certificates | No shares of Common Stock shall be issued to you prior to the date on which the Restricted Stock Units vest. After any Restricted Stock Units vest pursuant to this Agreement, the Company shall promptly cause to be issued in book-entry form, registered in your name or in the name of your legal representatives or heirs, as the case may be, the number of shares of Common Stock representing your vested Restricted Stock Units. No fractional shares shall be issued. |
Section 409A | This provision applies only if the Company determines that you are a “specified employee,” as defined in the regulations under Section 409A of the Code, at the time of your “separation from service,” as defined in those regulations. If this paragraph applies, then any Restricted Stock Units, and any Dividend Equivalents thereon, that otherwise would have been settled or paid during the first six months following your separation from service will instead be settled or paid on the first business day following the six-month anniversary of your separation from service, unless the settlement of those units is exempt from Section 409A of the Code. |
Stockholder Rights | The Restricted Stock Units do not entitle you to any of the rights of a stockholder of the Company. Your rights, including rights to any Dividend Equivalents, shall remain forfeitable at all times prior to the date on which you vest in your Award. Upon settlement of the Restricted Stock Units into shares of Common Stock, you will obtain full voting and other rights as a stockholder of the Company. |
Units Restricted | You may not sell, transfer, pledge or otherwise dispose of any Restricted Stock Units or rights under this Agreement other than by will or by the laws of descent and distribution. |
Withholding Taxes | Regardless of any action the Company and/or, if different, the Subsidiary of the Company which employs you (the “Employer”) take with respect to any or all income tax (including U.S. federal, state and local tax and/or non-U.S. tax), social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or the Employer: (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Stock Units, including the award of the Restricted Stock Units, the vesting of the Restricted Stock Units, the issuance of shares of Common Stock in settlement of the Restricted Stock Units, the subsequent sale of shares acquired at vesting, the receipt of any Dividend Equivalents and the receipt of any dividends; and (b) do not commit to structure the terms of this Award or any aspect of the Restricted Stock Units to reduce or eliminate your liability for Tax-Related Items. Prior to the relevant taxable event, you shall pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding obligations for Tax-Related Items of the Company and/or the Employer. With the Company’s consent, these arrangements may include (i) withholding from any cash Dividend Equivalents or shares of Company stock that otherwise would be issued to you when they vest, (ii) surrendering shares that you previously acquired, (iii) deducting the withholding taxes from any cash compensation payable to you or (iv) withholding from proceeds of the sale of shares of Common Stock issued upon settlement of the Restricted Stock Units. Notwithstanding the foregoing, if you are an officer of the Company under Section 16 of the Exchange Act, any withholding or surrender of shares of Common Stock pursuant to (i) or (ii) hereof will be approved in advance by the Board or Committee to the extent necessary to qualify such transaction as exempt under Exchange Act Rule 16b-3. The fair market value of the shares you surrender, determined as of the date taxes otherwise would have been withheld in cash, will be applied as a credit against the withholding taxes. The Company may refuse to deliver the shares of Common Stock to you if you fail to comply with your obligations in connection with the Tax-Related Items as described in this provision. |
Restrictions on Resale | You agree not to sell any shares of Common Stock you receive under this Agreement at a time when applicable laws, regulations, Company trading policies (including the Company’s Insider Trading Policy, a copy of which can be found on the Company’s intranet) or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify. |
No Retention Rights | Except to the extent provided specifically in an agreement between you and the Company, neither this Award nor this Agreement gives you the right to be employed or retained by the Company or a subsidiary of the Company in any capacity; the Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause. |
In accepting this Award, you acknowledge that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Agreement; (b) the Award is voluntary and occasional and does not create any contractual or other right to receive future awards of Restricted Stock Units, and any Dividend Equivalents thereon, or benefits in lieu of Restricted Stock Units, and any Dividend Equivalents thereon, even if Restricted Stock Units have been granted in the past; (c) all decisions with respect to future awards, if any, will be at the sole discretion of the Company; (d) your participation in the Plan is voluntary; (e) your participation in the Plan shall not create a right to further employment with your Employer and shall not interfere with the ability of your Employer to terminate your Service at any time with or without cause; (f) the Award is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or any subsidiary of the Company, and that is outside the scope of your employment or service contract, if any; (g) the Award is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or any subsidiary of the Company; (h) in the event that you are not an employee of the Company, the Award and your participation in the Plan will not be interpreted to form an employment or service contract or relationship with the Company and, furthermore, the Award and your participation in the Plan will not be interpreted to form an employment or service contract or relationship with the Employer or any other subsidiary of the Company; (i) the future value of the underlying shares of Common Stock is unknown and cannot be predicted with certainty; (j) in consideration of the Award, no claim or entitlement to compensation or damages shall arise from termination of the Award or from any diminution in value of the Award or shares of Common Stock acquired upon vesting of the Award resulting from termination of Service (for any reason whatsoever and whether or not in breach of local labor laws); (k) the Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan or your acquisition or sale of the underlying shares of Common Stock; and (l) you are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan. | |
Adjustments | In the event of a stock split, a stock dividend or a similar change in Company stock, the number of Restricted Stock Units that will vest in any future installments will be adjusted accordingly, as provided for in the Plan. |
Repayment/Forfeiture | Any benefits you may receive hereunder shall be subject to repayment or forfeiture as may be required to comply with (i) any applicable listing standards of a national securities exchange adopted in accordance with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations of the U.S. Securities and Exchange Commission adopted thereunder, (ii) recoupment requirements under any other U.S. laws or under the laws of any other jurisdiction and (iii) any policies adopted by the Company to implement such requirements, all to the extent determined by the Company in its discretion to be applicable to you. |
Data Privacy Notice and Consent | a) Data Collection and Usage. The Company and the Employer collect, process and use certain personal information about you, including, but not limited to, your name, home address and telephone number, email address, date of birth, social insurance, passport or other identification number (e.g., resident registration number), salary, nationality, job title, any shares of Common Stock or directorships held in the Company, details of all purchase rights or any other entitlement to shares of Common Stock or equivalent benefits awarded, canceled, exercised, purchased, vested, unvested or outstanding in your favor (“Data”), for the purposes of implementing, administering and managing your participation in the Plan. The legal basis, where required, for the processing of Data is your consent. b) Stock Plan Administration Service Providers. The Company will transfer Data to E*TRADE Financial Services, Inc. or Morgan Stanley Smith Barney, which are assisting the Company with the implementation, administration and management of the Plan (the “Designated Broker”). The Company may select different or additional service providers in the future and share Data with such other provider(s) serving in a similar manner. You may be asked to agree on separate terms and data processing practices with the Designated Broker, with such agreement being a condition to the ability to participate in the Plan. c) International Data Transfers. The Company and the Designated Broker are based in the United States. Your country or jurisdiction may have different data privacy laws and protections than the United States. For example, the European Commission has issued a limited adequacy finding with respect to the United States that applies only to the extent companies register for the EU-U.S. Privacy Shield program (which the Company currently is not). The Company’s legal basis, where required, for the transfer of Data is your consent. d) Data Retention. The Company will hold and use Data only as long as is necessary to implement, administer and manage your participation in the Plan, or as required to comply with legal or regulatory obligations, including under tax, exchange control, labor and securities laws. e) Voluntariness and Consequences of Consent Denial or Withdrawal. Participation in the Plan is voluntary, and you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your salary from or employment and career with the Employer will not be affected; the only consequence of refusing or you withdrawing consent is that the Company would not be able to grant the Restricted Stock Units or other equity awards to you or administer or maintain such awards. f) Data Subject Rights. You may have a number of rights under data privacy laws in your jurisdiction. Depending on where you are based, such rights may include the right to (i) request access or copies of Data the Company processes, (ii) rectification of incorrect Data, (iii) deletion of Data, (iv) restrictions on processing of Data, (v) portability of Data, (vi) lodge complaints with competent authorities in your jurisdiction, and/or (vii) receive a list with the names and addresses of any potential recipients of Data. To receive clarification regarding these rights or to exercise these rights, you can contact the local human resources representative. g) By accepting the Restricted Stock Units and indicating consent via the Company’s acceptance procedure, you are declaring agreement with the data processing practices described herein and consent to the collection, processing and use of Data by the Company and the transfer of Data to the recipients mentioned above, including recipients located in countries which do not adduce an adequate level of protection from a European (or other non-U.S.) data protection law perspective, for the purposes described above. Finally, you understand that the Company may rely on a different basis for the processing or transfer of Data in the future and/or request that you provide another data privacy consent. If applicable, you agree that upon request of the Company or the Employer, you will provide an executed acknowledgement or data privacy consent form (or any other agreements or consents) that the Company and/or the Employer may deem necessary to obtain from you for the purpose of administering your participation in the Plan in compliance with the data privacy laws in your country, either now or in the future. You understand and agree that you will not be able to participate in the Plan if you fail to provide any such consent or agreement requested by the Company and/or the Employer. |
Insider Trading Restrictions / Market Abuse Laws | You acknowledge that, depending on your or your broker’s country or the country in which shares of Common Stock are listed, you may be subject to insider trading restrictions and/or market abuse laws, which may affect your ability to accept, acquire, sell or otherwise dispose of shares of Common Stock, rights to shares of Common Stock (e.g., Restricted Stock Units) or rights linked to the value of shares of Common Stock under the Plan during such times that you are considered to have “inside information” regarding the Company (as defined by the laws or regulations in the applicable jurisdictions or your country). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders you placed before you possessed inside information. Furthermore, you could be prohibited from (i) disclosing the inside information to any third party and (ii) “tipping” third parties or causing them otherwise to buy or sell securities. You should keep in mind that third parties include fellow employees. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. You understand you are responsible for ensuring compliance with any restrictions and should consult with your personal legal advisor on this matter. |
Severability | The provisions of this Agreement are severable and if any one or more provisions are determined to be invalid or otherwise enforceable, in whole or in part, the remaining provisions shall continue in effect. |
Applicable Law | This Agreement will be interpreted and enforced with respect to issues of contract law under the laws of the State of Delaware (except their choice of law provisions). For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or this Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of California and agree that such litigation shall be conducted only in the courts of San Mateo County, California, U.S.A. or the federal courts for the United States for the Northern District of California, and no other courts, where this grant is made and/or to be performed. |
The Plan and Other Agreements | The text of the Plan is incorporated in this Agreement by reference. A copy of the Plan is available on the Company’s intranet or by request to the Stock Services Department. This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Award. Any prior agreements, commitments or negotiations concerning this Award are superseded. This Agreement may be amended only by another written agreement between the parties. |
Payment for Shares | No payment is required for the Restricted Stock Units, and any Dividend Equivalents thereon, you receive. |
Vesting | The Restricted Stock Units and any Dividend Equivalents thereon, that you are receiving will vest in accordance with the Vesting Schedule stated in the Notice of Restricted Stock Unit Award for Executives. |
No additional Restricted Stock Units, or any Dividend Equivalents thereon, vest after your Service has terminated for any reason. It is intended that vesting in the Restricted Stock Units, and any Dividend Equivalents thereon, is commensurate with a full-time work schedule. For possible adjustments that may be made by the Company, see the provision below entitled “Leaves of Absence and Part-Time Work.” | |
Dividend Equivalents | You will be credited with Dividend Equivalents equal to the dividends you would have received if you had been the record owner of the Common Stock underlying the Restricted Stock Units on each dividend record date on or after the Date of Grant and through the date you receive a settlement pursuant to the provision below entitled “Settlement of Units” (the “Dividend Equivalent”). Dividend Equivalents shall be subject to the same terms and conditions as the Restricted Stock Units originally awarded pursuant to this Agreement, and they shall vest (or, if applicable, be forfeited) as if they had been granted at the same time as the original Restricted Stock Unit award. If a dividend on the Common Stock is payable wholly or partially in Common Stock, the Dividend Equivalent representing that portion shall be in the form of additional Restricted Stock Units, credited on a one-for-one basis. If a dividend on the Common Stock is payable wholly or partially in cash, the Dividend Equivalent representing that portion shall be in the form of cash, which will be paid to you, without interest, as described below in the provision “Settlement of Units;” provided, however, that the Committee may, in its discretion, provide that the cash portion of any extraordinary distribution on the Common Stock shall be in the form of additional Restricted Stock Units. If a dividend on the Common Stock is payable wholly or partially in other than cash or Common Stock, the Committee may, in its discretion, provide for such Dividend Equivalents with respect to that portion as it deems appropriate under the circumstances. |
Settlement of Units | Each Restricted Stock Unit, and any Dividend Equivalents thereon, will be settled on the first Trading Day that occurs on or after the day when the Restricted Stock Unit vests. However, each Restricted Stock Unit, and any Dividend Equivalents thereon, must be settled not later than March 15 of the calendar year after the calendar year in which the Restricted Stock Unit vests. At the time of settlement, you will receive one share of the Company’s Common Stock for each vested Restricted Stock Unit and an amount of cash, without additional earnings or interest and rounded to the nearest whole cent, equal to (i) the value of any fractional share and (ii) the cash portion of the accumulated Dividend Equivalents applicable to the vested Restricted Stock Units, less any Tax-Related Items withholding. Any cash may be distributed to you directly or may be used to offset the amount of any Tax-Related Items withholding arising from the vesting/settlement of the Restricted Stock Units and any Dividend Equivalents thereon. |
Trading Day | “Trading Day” means a day that satisfies each of the following requirements: The Nasdaq Global Market is open for trading on that day; You are permitted to sell shares of Common Stock on that day without incurring liability under Section 16(b) of the Securities Exchange Act; Either (a) you are not in possession of material non-public information that would make it illegal for you to sell shares of the Company’s Common Stock on that day under Rule 10b-5 of the U.S. Securities and Exchange Commission or (b) you have a trading plan that complies with the requirements of Rule 10b5-1(c)(1) of the Securities Exchange Act that covers the shares underlying the vesting Restricted Stock Units; Under the Company’s Insider Trading Policy, you are permitted to sell shares of Common Stock on that day, and You are not prohibited from selling shares of Common Stock on that day by a written agreement between you and the Company or a third party. |
Change in Control | Except to the extent set forth in the Notice of Restricted Stock Unit Award, in the event of any Change in Control, vesting of the Target Restricted Stock Units, and any Dividend Equivalents thereon, will automatically accelerate in full as described in Article X of the Plan. However, vesting of the Target Restricted Stock Units, and any Dividend Equivalents thereon, will not automatically accelerate if and to the extent the Restricted Stock Units are, in connection with the Change in Control, either to be assumed by the successor corporation (or its parent) or to be replaced with a comparable award for shares of the capital stock of the successor corporation (or its parent). The determination of award comparability will be made by the Committee, and its determination will be final, binding and conclusive. |
In addition, you will vest as to 100% of the unvested Target Restricted Stock Units, and any Dividend Equivalents thereon, if the Company is subject to a Change in Control before your Service terminates, and you are subject to a Qualifying Termination (as defined below) within 12 months after the Change in Control. Notwithstanding the foregoing, any action taken in connection with a Change in Control must either (a) preserve the exemption of the Restricted Stock Units, and any Dividend Equivalents thereon, from Section 409A of the Code or (b) comply with Section 409A of the Code. | |
Qualifying Termination | A Qualifying Termination means a Separation (as defined below) resulting from: (a) involuntary discharge for any reason other than Cause (as defined below) within 12 months after a Change in Control; or (b) your voluntary resignation for Good Reason (as defined below), between the date that is four months following a Change in Control and the date that is 12 months following a Change in Control; provided, however, that the grounds for Good Reason may arise at any time within the 12 months following the Change in Control. Cause means your unauthorized use or disclosure of trade secrets that causes material harm to the Company, your conviction of, or a plea of “guilty” or “no contest” to, a felony or your gross misconduct. Good Reason means: (i) a material diminution in your authority, duties or responsibilities; (ii) a material reduction in your level of compensation (including base salary and target bonus) other than pursuant to a Company-wide reduction of compensation where the reduction affects the other executive officers and your reduction is substantially equal, on a percentage basis, to the reduction of the other executive officers; or (iii) a relocation of your place of employment by more than 30 miles, provided and only if such change, reduction or relocation is effected by the Company without your consent1. For vesting to accelerate as a result of a voluntary resignation for Good Reason, all of the following requirements must be satisfied: (1) you must provide notice to the Company of your intent to assert Good Reason within 120 days of the initial existence of one or more of the conditions set forth in (i) through (iii) of the preceding paragraph; (2) the Company will have 30 days from the date of such notice to remedy the condition and, if it does so, you may withdraw your resignation or may resign with no acceleration benefit; and (3) any termination of employment under this provision must occur within 18 months of the initial existence of one or more of the conditions set forth in subclauses (i) through (iii). Should the Company remedy the condition as set forth above and then one or more of the conditions arises again within 12 months following the occurrence of a Change in Control, you may assert Good Reason again subject to all of the conditions set forth herein. Separation means a “separation from service,” as defined in the regulations under Section 409A of the Code. |
1This definition of “Good Reason” is for the CEO, CFO, CLO & CHRO. All other executives have the following definition of “Good Reason”: “Good Reason means: (i) a material diminution in your authority, duties or responsibilities (provided, however, if by virtue of the Company being acquired and made a division or business unit of a larger entity following a Change in Control, you retain substantially similar authority, duties or responsibilities for such division or business unit of the acquiring corporation but not for the entire acquiring corporation, such reduction in authority, duties or responsibilities shall not constitute Good Reason for purposes of this subclause (i)); (ii) a 10% or greater reduction in your level of compensation, which will be determined based on an average of your annual Total Direct Compensation for the prior three calendar years or, if employed for fewer than three calendar years, the number of years you have been employed by the Company (referred to below as the “look-back years”); or (iii) a relocation of your place of employment by more than 30 miles, provided and only if such change, reduction or relocation is effected by the Company without your consent. For purposes of the foregoing, Total Direct Compensation means total target cash compensation (annual base salary plus target annual cash incentives).” | |
Forfeiture | If your Service terminates for any reason, then your Restricted Stock Units, and any Dividend Equivalents thereon, will be forfeited to the extent that they have not vested before the termination date, unless there is vesting acceleration in the event of a Qualifying Termination. Forfeiture means that the Restricted Stock Units, and any Dividend Equivalents thereon, will immediately revert to the Company. You receive no payment for Restricted Stock Units, and any Dividend Equivalents thereon, that are forfeited. The Committee determines when your Service terminates for this purpose. |
Leaves of Absence and Part-Time Work | For purposes of this Award, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing. But your Service terminates when the approved leave ends, unless you immediately return to active work. If you go on a leave of absence that lasts or is expected to last seven days or longer, then vesting will be suspended during the leave to the extent provided for in the Company’s leave policy. Upon your return to active work (as determined by the Company), vesting will resume; however, unless otherwise provided in the Company’s leave policy, you will not receive credit for any vesting until you work an amount of time equal to the period of your leave. If you and the Company or a subsidiary of the Company agree to a reduction in your scheduled work hours, then the Company reserves the right to modify the rate at which the Restricted Stock Units, and any Dividend Equivalents thereon, vest, so that the rate of vesting is commensurate with your reduced work schedule. Any such adjustment shall be consistent with the Company’s policies for part-time or reduced work schedules or shall be pursuant to the terms of an agreement between you and the Company or a subsidiary of the Company pertaining to your reduced work schedule. The Company shall not be required to adjust any vesting schedule pursuant to this provision. Further, the vesting schedule shall not be adjusted as described in this provision to the extent that the adjustment would cause the Restricted Stock Units to be subject to, or to violate, Section 409A of the Code. |
Settlement / Stock Certificates | No shares of Common Stock shall be issued to you prior to the date on which the Restricted Stock Units vest. After any Restricted Stock Units vest pursuant to this Agreement, the Company shall promptly cause to be issued in book-entry form, registered in your name or in the name of your legal representatives or heirs, as the case may be, the number of shares of Common Stock representing your vested Restricted Stock Units. No fractional shares shall be issued. |
Section 409A | This provision applies only if the Company determines that you are a “specified employee,” as defined in the regulations under Section 409A of the Code, at the time of your “separation from service,” as defined in those regulations. If this paragraph applies, then any Restricted Stock Units, and any Dividend Equivalents thereon, that otherwise would have been settled or paid during the first six months following your separation from service will instead be settled or paid on the first business day following the six-month anniversary of your separation from service, unless the settlement of those units is exempt from Section 409A of the Code. |
Stockholder Rights | The Restricted Stock Units do not entitle you to any of the rights of a stockholder of the Company. Your rights, including rights to any Dividend Equivalents, shall remain forfeitable at all times prior to the date on which you vest in your Award. Upon settlement of the Restricted Stock Units into shares of Common Stock, you will obtain full voting and other rights as a stockholder of the Company. |
Units Restricted | You may not sell, transfer, pledge or otherwise dispose of any Restricted Stock Units or rights under this Agreement other than by will or by the laws of descent and distribution. |
Withholding Taxes | Regardless of any action the Company and/or, if different, the Subsidiary of the Company which employs you (the “Employer”) take with respect to any or all income tax (including U.S. federal, state and local tax and/or non-U.S. tax), social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or the Employer: (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Stock Units, including the award of the Restricted Stock Units, the vesting of the Restricted Stock Units, the issuance of shares of Common Stock in settlement of the Restricted Stock Units, the subsequent sale of shares acquired at vesting, the receipt of any Dividend Equivalents and the receipt of any dividends; and (b) do not commit to structure the terms of this Award or any aspect of the Restricted Stock Units to reduce or eliminate your liability for Tax-Related Items. Prior to the relevant taxable event, you shall pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding obligations for Tax-Related Items of the Company and/or the Employer. With the Company’s consent, these arrangements may include (i) withholding from any cash Dividend Equivalents or shares of Company stock that otherwise would be issued to you when they vest, (ii) surrendering shares that you previously acquired, (iii) deducting the withholding taxes from any cash compensation payable to you or (iv) withholding from proceeds of the sale of shares of Common Stock issued upon settlement of the Restricted Stock Units. Notwithstanding the foregoing, if you are an officer of the Company under Section 16 of the Exchange Act, any withholding or surrender of shares of Common Stock pursuant to (i) or (ii) hereof will be approved in advance by the Board or Committee to the extent necessary to qualify such transaction as exempt under Exchange Act Rule 16b-3. The fair market value of the shares you surrender, determined as of the date taxes otherwise would have been withheld in cash, will be applied as a credit against the withholding taxes. The Company may refuse to deliver the shares of Common Stock to you if you fail to comply with your obligations in connection with the Tax-Related Items as described in this provision. |
Restrictions on Resale | You agree not to sell any shares of Common Stock you receive under this Agreement at a time when applicable laws, regulations, Company trading policies (including the Company’s Insider Trading Policy, a copy of which can be found on the Company’s intranet) or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify. |
No Retention Rights | Except to the extent provided specifically in an agreement between you and the Company, neither this Award nor this Agreement gives you the right to be employed or retained by the Company or a subsidiary of the Company in any capacity; the Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause. |
In accepting this Award, you acknowledge that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Agreement; (b) the Award is voluntary and occasional and does not create any contractual or other right to receive future awards of Restricted Stock Units, and any Dividend Equivalents thereon, or benefits in lieu of Restricted Stock Units, and any Dividend Equivalents thereon, even if Restricted Stock Units have been granted in the past; (c) all decisions with respect to future awards, if any, will be at the sole discretion of the Company; (d) your participation in the Plan is voluntary; (e) your participation in the Plan shall not create a right to further employment with your Employer and shall not interfere with the ability of your Employer to terminate your Service at any time with or without cause; (f) the Award is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or any subsidiary of the Company, and that is outside the scope of your employment or service contract, if any; (g) the Award is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or any subsidiary of the Company; (h) in the event that you are not an employee of the Company, the Award and your participation in the Plan will not be interpreted to form an employment or service contract or relationship with the Company and, furthermore, the Award and your participation in the Plan will not be interpreted to form an employment or service contract or relationship with the Employer or any other subsidiary of the Company; (i) the future value of the underlying shares of Common Stock is unknown and cannot be predicted with certainty; (j) in consideration of the Award, no claim or entitlement to compensation or damages shall arise from termination of the Award or from any diminution in value of the Award or shares of Common Stock acquired upon vesting of the Award resulting from termination of Service (for any reason whatsoever and whether or not in breach of local labor laws); (k) the Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan or your acquisition or sale of the underlying shares of Common Stock; and (l) you are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan. | |
Adjustments | In the event of a stock split, a stock dividend or a similar change in Company stock, the number of Restricted Stock Units that will vest in any future installments will be adjusted accordingly, as provided for in the Plan. |
Repayment/Forfeiture | Any benefits you may receive hereunder shall be subject to repayment or forfeiture as may be required to comply with (i) any applicable listing standards of a national securities exchange adopted in accordance with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations of the U.S. Securities and Exchange Commission adopted thereunder, (ii) recoupment requirements under any other U.S. laws or under the laws of any other jurisdiction and (iii) any policies adopted by the Company to implement such requirements, all to the extent determined by the Company in its discretion to be applicable to you. |
Data Privacy Notice and Consent | a) Data Collection and Usage. The Company and the Employer collect, process and use certain personal information about you, including, but not limited to, your name, home address and telephone number, email address, date of birth, social insurance, passport or other identification number (e.g., resident registration number), salary, nationality, job title, any shares of Common Stock or directorships held in the Company, details of all purchase rights or any other entitlement to shares of Common Stock or equivalent benefits awarded, canceled, exercised, purchased, vested, unvested or outstanding in your favor (“Data”), for the purposes of implementing, administering and managing your participation in the Plan. The legal basis, where required, for the processing of Data is your consent. b) Stock Plan Administration Service Providers. The Company will transfer Data to E*TRADE Financial Services, Inc. or Morgan Stanley Smith Barney, which are assisting the Company with the implementation, administration and management of the Plan (the “Designated Broker”). The Company may select different or additional service providers in the future and share Data with such other provider(s) serving in a similar manner. You may be asked to agree on separate terms and data processing practices with the Designated Broker, with such agreement being a condition to the ability to participate in the Plan. c) International Data Transfers. The Company and the Designated Broker are based in the United States. Your country or jurisdiction may have different data privacy laws and protections than the United States. For example, the European Commission has issued a limited adequacy finding with respect to the United States that applies only to the extent companies register for the EU-U.S. Privacy Shield program (which the Company currently is not). The Company’s legal basis, where required, for the transfer of Data is your consent. d) Data Retention. The Company will hold and use Data only as long as is necessary to implement, administer and manage your participation in the Plan, or as required to comply with legal or regulatory obligations, including under tax, exchange control, labor and securities laws. e) Voluntariness and Consequences of Consent Denial or Withdrawal. Participation in the Plan is voluntary, and you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your salary from or employment and career with the Employer will not be affected; the only consequence of refusing or you withdrawing consent is that the Company would not be able to grant the Restricted Stock Units or other equity awards to you or administer or maintain such awards. f) Data Subject Rights. You may have a number of rights under data privacy laws in your jurisdiction. Depending on where you are based, such rights may include the right to (i) request access or copies of Data the Company processes, (ii) rectification of incorrect Data, (iii) deletion of Data, (iv) restrictions on processing of Data, (v) portability of Data, (vi) lodge complaints with competent authorities in your jurisdiction, and/or (vii) receive a list with the names and addresses of any potential recipients of Data. To receive clarification regarding these rights or to exercise these rights, you can contact the local human resources representative. g) By accepting the Restricted Stock Units and indicating consent via the Company’s acceptance procedure, you are declaring agreement with the data processing practices described herein and consent to the collection, processing and use of Data by the Company and the transfer of Data to the recipients mentioned above, including recipients located in countries which do not adduce an adequate level of protection from a European (or other non-U.S.) data protection law perspective, for the purposes described above. Finally, you understand that the Company may rely on a different basis for the processing or transfer of Data in the future and/or request that you provide another data privacy consent. If applicable, you agree that upon request of the Company or the Employer, you will provide an executed acknowledgement or data privacy consent form (or any other agreements or consents) that the Company and/or the Employer may deem necessary to obtain from you for the purpose of administering your participation in the Plan in compliance with the data privacy laws in your country, either now or in the future. You understand and agree that you will not be able to participate in the Plan if you fail to provide any such consent or agreement requested by the Company and/or the Employer. |
Insider Trading Restrictions / Market Abuse Laws | You acknowledge that, depending on your or your broker’s country or the country in which shares of Common Stock are listed, you may be subject to insider trading restrictions and/or market abuse laws, which may affect your ability to accept, acquire, sell or otherwise dispose of shares of Common Stock, rights to shares of Common Stock (e.g., Restricted Stock Units) or rights linked to the value of shares of Common Stock under the Plan during such times that you are considered to have “inside information” regarding the Company (as defined by the laws or regulations in the applicable jurisdictions or your country). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders you placed before you possessed inside information. Furthermore, you could be prohibited from (i) disclosing the inside information to any third party and (ii) “tipping” third parties or causing them otherwise to buy or sell securities. You should keep in mind that third parties include fellow employees. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. You understand you are responsible for ensuring compliance with any restrictions and should consult with your personal legal advisor on this matter. |
Severability | The provisions of this Agreement are severable and if any one or more provisions are determined to be invalid or otherwise enforceable, in whole or in part, the remaining provisions shall continue in effect. |
Applicable Law | This Agreement will be interpreted and enforced with respect to issues of contract law under the laws of the State of Delaware (except their choice of law provisions). For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or this Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of California and agree that such litigation shall be conducted only in the courts of San Mateo County, California, U.S.A. or the federal courts for the United States for the Northern District of California, and no other courts, where this grant is made and/or to be performed. |
The Plan and Other Agreements | The text of the Plan is incorporated in this Agreement by reference. A copy of the Plan is available on the Company’s intranet or by request to the Stock Services Department. This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Award. Any prior agreements, commitments or negotiations concerning this Award are superseded. This Agreement may be amended only by another written agreement between the parties. |
Ramped Accelerator/Decelerator (0% Min Payout) | ||||||||
Index | Russell 1000 - IWB Fund | Performance | Payout | Scale | ||||
Perf. Period | 3 years | >50% | 200% | 2:1 | ||||
TSR Calc. | EQIX vs. Russell 1000 | +50% | 200% | 2:1 | ||||
+40% | 180% | 2:1 | ||||||
Min TSR for payout | NA | +30% | 160% | 2:1 | ||||
Minimum Payout | 0% | +25% | 150% | 2:1 | ||||
Maximum Payout | 200% | +20% | 140% | 2:1 | ||||
+10% | 120% | 2:1 | ||||||
Performance Scale | Above Index | 2:1 | +1% | 102% | 2:1 | |||
Index | 1:1 | = | 100% | 1:1 | ||||
Below Index | 2:1 | -1% | 98% | 2:1 | ||||
-10% | 80% | 2:1 | ||||||
-20% | 60% | 2:1 | ||||||
-30% | 40% | 2:1 | ||||||
-35% | 30% | 2:1 | ||||||
-40% | 20% | 2:1 | ||||||
>-40% | 0% | 2:1 | ||||||
• | with respect to 33 1/3% of those units on the first Trading Day that coincides with or follows January 15, 2021; |
• | with respect to 33 1/3% of those units on the first Trading Day that coincides with or follows January 15, 2022; and |
• | with respect to 33 1/3% of those units on the first Trading Day that coincides with or follows January 15, 2023. |
Payment for Shares | No payment is required for the Restricted Stock Units, and any Dividend Equivalents thereon, you receive. |
Vesting | The Restricted Stock Units and any Dividend Equivalents thereon, that you are receiving will vest in accordance with the Vesting Schedule stated in the Notice of Restricted Stock Unit Award for Executives; provided, however, that if your Service terminates due to your death then the portion of the Restricted Stock Units, and any Dividend Equivalents thereon, that would have become vested on the next scheduled vesting date will become vested and the underlying shares (and cash equal to the Dividend Equivalents thereon) will be released to your estate not later than December 31 of the calendar year following your death. |
No additional Restricted Stock Units, or any Dividend Equivalents thereon, vest after your Service has terminated for any reason other than death. It is intended that vesting in the Restricted Stock Units, and any Dividend Equivalents thereon, is commensurate with a full-time work schedule. For possible adjustments that may be made by the Company, see the provision below entitled “Leaves of Absence and Part-Time Work.” | |
Dividend Equivalents | You will be credited with Dividend Equivalents equal to the dividends you would have received if you had been the record owner of the Common Stock underlying the Restricted Stock Units on each dividend record date on or after the Date of Grant and through the date you receive a settlement pursuant to the provision below entitled “Settlement of Units” (the “Dividend Equivalent”). Dividend Equivalents shall be subject to the same terms and conditions as the Restricted Stock Units originally awarded pursuant to this Agreement, and they shall vest (or, if applicable, be forfeited) as if they had been granted at the same time as the original Restricted Stock Unit award. If a dividend on the Common Stock is payable wholly or partially in Common Stock, the Dividend Equivalent representing that portion shall be in the form of additional Restricted Stock Units, credited on a one-for-one basis. If a dividend on the Common Stock is payable wholly or partially in cash, the Dividend Equivalent representing that portion shall be in the form of cash, which will be paid to you, without interest, as described below in the provision “Settlement of Units;” provided, however, that the Committee may, in its discretion, provide that the cash portion of any extraordinary distribution on the Common Stock shall be in the form of additional Restricted Stock Units. If a dividend on the Common Stock is payable wholly or partially in other than cash or Common Stock, the Committee may, in its discretion, provide for such Dividend Equivalents with respect to that portion as it deems appropriate under the circumstances. |
Settlement of Units | Each Restricted Stock Unit, and any Dividend Equivalents thereon, will be settled on the first Trading Day that occurs on or after the day when the Restricted Stock Unit vests. However, each Restricted Stock Unit, and any Dividend Equivalents thereon, must be settled not later than March 15 of the calendar year after the calendar year in which the Restricted Stock Unit vests (or December 31 of such calendar year in the case of your death, as described above in the provision entitled “Vesting”). At the time of settlement, you will receive one share of the Company’s Common Stock for each vested Restricted Stock Unit and an amount of cash, without additional earnings or interest and rounded to the nearest whole cent, equal to (i) the value of any fractional share and (ii) the cash portion of the accumulated Dividend Equivalents applicable to the vested Restricted Stock Units, less any Tax-Related Items withholding. Any cash may be distributed to you directly or may be used to offset the amount of any Tax-Related Items withholding arising from the vesting/settlement of the Restricted Stock Units and any Dividend Equivalents thereon. |
Trading Day | “Trading Day” means a day that satisfies each of the following requirements: The Nasdaq Global Market is open for trading on that day; You are permitted to sell shares of Common Stock on that day without incurring liability under Section 16(b) of the Securities Exchange Act; Either (a) you are not in possession of material non-public information that would make it illegal for you to sell shares of the Company’s Common Stock on that day under Rule 10b-5 of the U.S. Securities and Exchange Commission or (b) you have a trading plan that complies with the requirements of Rule 10b5-1(c)(1) of the Securities Exchange Act that covers the shares underlying the vesting Restricted Stock Units; Under the Company’s Insider Trading Policy, you are permitted to sell shares of Common Stock on that day, and You are not prohibited from selling shares of Common Stock on that day by a written agreement between you and the Company or a third party. |
Change in Control | Except to the extent set forth in the Notice of Restricted Stock Unit Award, in the event of any Change in Control, vesting of the Target Restricted Stock Units, and any Dividend Equivalents thereon, will automatically accelerate in full as described in Article X of the Plan. However, vesting of the Target Restricted Stock Units, and any Dividend Equivalents thereon, will not automatically accelerate if and to the extent the Restricted Stock Units are, in connection with the Change in Control, either to be assumed by the successor corporation (or its parent) or to be replaced with a comparable award for shares of the capital stock of the successor corporation (or its parent). The determination of award comparability will be made by the Committee, and its determination will be final, binding and conclusive. |
In addition, you will vest as to 100% of the unvested Target Restricted Stock Units, and any Dividend Equivalents thereon, if the Company is subject to a Change in Control before your Service terminates, and you are subject to a Qualifying Termination (as defined below) within 12 months after the Change in Control. Notwithstanding the foregoing, any action taken in connection with a Change in Control must either (a) preserve the exemption of the Restricted Stock Units, and any Dividend Equivalents thereon, from Section 409A of the Code or (b) comply with Section 409A of the Code. | |
Qualifying Termination | A Qualifying Termination means a Separation (as defined below) resulting from: (a) involuntary discharge for any reason other than Cause (as defined below) within 12 months after a Change in Control; or (b) your voluntary resignation for Good Reason (as defined below), between the date that is four months following a Change in Control and the date that is 12 months following a Change in Control; provided, however, that the grounds for Good Reason may arise at any time within the 12 months following the Change in Control. Cause means your unauthorized use or disclosure of trade secrets that causes material harm to the Company, your conviction of, or a plea of “guilty” or “no contest” to, a felony or your gross misconduct. Good Reason means: (i) a material diminution in your authority, duties or responsibilities; (ii) a material reduction in your level of compensation (including base salary and target bonus) other than pursuant to a Company-wide reduction of compensation where the reduction affects the other executive officers and your reduction is substantially equal, on a percentage basis, to the reduction of the other executive officers; or (iii) a relocation of your place of employment by more than 30 miles, provided and only if such change, reduction or relocation is effected by the Company without your consent1. For vesting to accelerate as a result of a voluntary resignation for Good Reason, all of the following requirements must be satisfied: (1) you must provide notice to the Company of your intent to assert Good Reason within 120 days of the initial existence of one or more of the conditions set forth in (i) through (iii) of the preceding paragraph; (2) the Company will have 30 days from the date of such notice to remedy the condition and, if it does so, you may withdraw your resignation or may resign with no acceleration benefit; and (3) any termination of employment under this provision must occur within 18 months of the initial existence of one or more of the conditions set forth in subclauses (i) through (iii). Should the Company remedy the condition as set forth above and then one or more of the conditions arises again within 12 months following the occurrence of a Change in Control, you may assert Good Reason again subject to all of the conditions set forth herein. Separation means a “separation from service,” as defined in the regulations under Section 409A of the Code. |
1This definition of “Good Reason” is for the CEO, CFO, CLO & CHRO. All other executives have the following definition of “Good Reason”: “Good Reason means: (i) a material diminution in your authority, duties or responsibilities (provided, however, if by virtue of the Company being acquired and made a division or business unit of a larger entity following a Change in Control, you retain substantially similar authority, duties or responsibilities for such division or business unit of the acquiring corporation but not for the entire acquiring corporation, such reduction in authority, duties or responsibilities shall not constitute Good Reason for purposes of this subclause (i)); (ii) a 10% or greater reduction in your level of compensation, which will be determined based on an average of your annual Total Direct Compensation for the prior three calendar years or, if employed for fewer than three calendar years, the number of years you have been employed by the Company (referred to below as the “look-back years”); or (iii) a relocation of your place of employment by more than 30 miles, provided and only if such change, reduction or relocation is effected by the Company without your consent. For purposes of the foregoing, Total Direct Compensation means total target cash compensation (annual base salary plus target annual cash incentives).” | |
Forfeiture | If your Service terminates for any reason, then your Restricted Stock Units, and any Dividend Equivalents thereon, will be forfeited to the extent that they have not vested before the termination date, unless there is vesting acceleration in the event of a Qualifying Termination or in the event of your death. Forfeiture means that the Restricted Stock Units, and any Dividend Equivalents thereon, will immediately revert to the Company. You receive no payment for Restricted Stock Units, and any Dividend Equivalents thereon, that are forfeited. The Committee determines when your Service terminates for this purpose. |
Leaves of Absence and Part-Time Work | For purposes of this Award, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing. But your Service terminates when the approved leave ends, unless you immediately return to active work. If you go on a leave of absence that lasts or is expected to last seven days or longer, then vesting will be suspended during the leave to the extent provided for in the Company’s leave policy. Upon your return to active work (as determined by the Company), vesting will resume; however, unless otherwise provided in the Company’s leave policy, you will not receive credit for any vesting until you work an amount of time equal to the period of your leave. If you and the Company or a subsidiary of the Company agree to a reduction in your scheduled work hours, then the Company reserves the right to modify the rate at which the Restricted Stock Units, and any Dividend Equivalents thereon, vest, so that the rate of vesting is commensurate with your reduced work schedule. Any such adjustment shall be consistent with the Company’s policies for part-time or reduced work schedules or shall be pursuant to the terms of an agreement between you and the Company or a subsidiary of the Company pertaining to your reduced work schedule. The Company shall not be required to adjust any vesting schedule pursuant to this provision. Further, the vesting schedule shall not be adjusted as described in this provision to the extent that the adjustment would cause the Restricted Stock Units to be subject to, or to violate, Section 409A of the Code. |
Settlement / Stock Certificates | No shares of Common Stock shall be issued to you prior to the date on which the Restricted Stock Units vest. After any Restricted Stock Units vest pursuant to this Agreement, the Company shall promptly cause to be issued in book-entry form, registered in your name or in the name of your legal representatives or heirs, as the case may be, the number of shares of Common Stock representing your vested Restricted Stock Units. No fractional shares shall be issued. |
Section 409A | This provision applies only if the Company determines that you are a “specified employee,” as defined in the regulations under Section 409A of the Code, at the time of your “separation from service,” as defined in those regulations. If this paragraph applies, then any Restricted Stock Units, and any Dividend Equivalents thereon, that otherwise would have been settled or paid during the first six months following your separation from service will instead be settled or paid on the first business day following the six-month anniversary of your separation from service, unless the settlement of those units is exempt from Section 409A of the Code. |
Stockholder Rights | The Restricted Stock Units do not entitle you to any of the rights of a stockholder of the Company. Your rights, including rights to any Dividend Equivalents, shall remain forfeitable at all times prior to the date on which you vest in your Award. Upon settlement of the Restricted Stock Units into shares of Common Stock, you will obtain full voting and other rights as a stockholder of the Company. |
Units Restricted | You may not sell, transfer, pledge or otherwise dispose of any Restricted Stock Units or rights under this Agreement other than by will or by the laws of descent and distribution. |
Withholding Taxes | Regardless of any action the Company and/or, if different, the Subsidiary of the Company which employs you (the “Employer”) take with respect to any or all income tax (including U.S. federal, state and local tax and/or non-U.S. tax), social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and/or the Employer: (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Stock Units, including the award of the Restricted Stock Units, the vesting of the Restricted Stock Units, the issuance of shares of Common Stock in settlement of the Restricted Stock Units, the subsequent sale of shares acquired at vesting, the receipt of any Dividend Equivalents and the receipt of any dividends; and (b) do not commit to structure the terms of this Award or any aspect of the Restricted Stock Units to reduce or eliminate your liability for Tax-Related Items. Prior to the relevant taxable event, you shall pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all withholding obligations for Tax-Related Items of the Company and/or the Employer. With the Company’s consent, these arrangements may include (i) withholding from any cash Dividend Equivalents or shares of Company stock that otherwise would be issued to you when they vest, (ii) surrendering shares that you previously acquired, (iii) deducting the withholding taxes from any cash compensation payable to you or (iv) withholding from proceeds of the sale of shares of Common Stock issued upon settlement of the Restricted Stock Units. Notwithstanding the foregoing, if you are an officer of the Company under Section 16 of the Exchange Act, any withholding or surrender of shares of Common Stock pursuant to (i) or (ii) hereof will be approved in advance by the Board or Committee to the extent necessary to qualify such transaction as exempt under Exchange Act Rule 16b-3. The fair market value of the shares you surrender, determined as of the date taxes otherwise would have been withheld in cash, will be applied as a credit against the withholding taxes. The Company may refuse to deliver the shares of Common Stock to you if you fail to comply with your obligations in connection with the Tax-Related Items as described in this provision. |
Restrictions on Resale | You agree not to sell any shares of Common Stock you receive under this Agreement at a time when applicable laws, regulations, Company trading policies (including the Company’s Insider Trading Policy, a copy of which can be found on the Company’s intranet) or an agreement between the Company and its underwriters prohibit a sale. This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify. |
No Retention Rights | Except to the extent provided specifically in an agreement between you and the Company, neither this Award nor this Agreement gives you the right to be employed or retained by the Company or a subsidiary of the Company in any capacity; the Company and its subsidiaries reserve the right to terminate your Service at any time, with or without cause. |
In accepting this Award, you acknowledge that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, unless otherwise provided in the Plan and this Agreement; (b) the Award is voluntary and occasional and does not create any contractual or other right to receive future awards of Restricted Stock Units, and any Dividend Equivalents thereon, or benefits in lieu of Restricted Stock Units, and any Dividend Equivalents thereon, even if Restricted Stock Units have been granted in the past; (c) all decisions with respect to future awards, if any, will be at the sole discretion of the Company; (d) your participation in the Plan is voluntary; (e) your participation in the Plan shall not create a right to further employment with your Employer and shall not interfere with the ability of your Employer to terminate your Service at any time with or without cause; (f) the Award is an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to the Company or any subsidiary of the Company, and that is outside the scope of your employment or service contract, if any; (g) the Award is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services for the Company or any subsidiary of the Company; (h) in the event that you are not an employee of the Company, the Award and your participation in the Plan will not be interpreted to form an employment or service contract or relationship with the Company and, furthermore, the Award and your participation in the Plan will not be interpreted to form an employment or service contract or relationship with the Employer or any other subsidiary of the Company; (i) the future value of the underlying shares of Common Stock is unknown and cannot be predicted with certainty; (j) in consideration of the Award, no claim or entitlement to compensation or damages shall arise from termination of the Award or from any diminution in value of the Award or shares of Common Stock acquired upon vesting of the Award resulting from termination of Service (for any reason whatsoever and whether or not in breach of local labor laws); (k) the Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan or your acquisition or sale of the underlying shares of Common Stock; and (l) you are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan. | |
Adjustments | In the event of a stock split, a stock dividend or a similar change in Company stock, the number of Restricted Stock Units that will vest in any future installments will be adjusted accordingly, as provided for in the Plan. |
Repayment/Forfeiture | Any benefits you may receive hereunder shall be subject to repayment or forfeiture as may be required to comply with (i) any applicable listing standards of a national securities exchange adopted in accordance with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations of the U.S. Securities and Exchange Commission adopted thereunder, (ii) recoupment requirements under any other U.S. laws or under the laws of any other jurisdiction and (iii) any policies adopted by the Company to implement such requirements, all to the extent determined by the Company in its discretion to be applicable to you. |
Data Privacy Notice and Consent | Data Collection and Usage. The Company and the Employer collect, process and use certain personal information about you, including, but not limited to, your name, home address and telephone number, email address, date of birth, social insurance, passport or other identification number (e.g., resident registration number), salary, nationality, job title, any shares of Common Stock or directorships held in the Company, details of all purchase rights or any other entitlement to shares of Common Stock or equivalent benefits awarded, canceled, exercised, purchased, vested, unvested or outstanding in your favor (“Data”), for the purposes of implementing, administering and managing your participation in the Plan. The legal basis, where required, for the processing of Data is your consent. Stock Plan Administration Service Providers. The Company will transfer Data to E*TRADE Financial Services, Inc. or Morgan Stanley Smith Barney, which are assisting the Company with the implementation, administration and management of the Plan (the “Designated Broker”). The Company may select different or additional service providers in the future and share Data with such other provider(s) serving in a similar manner. You may be asked to agree on separate terms and data processing practices with the Designated Broker, with such agreement being a condition to the ability to participate in the Plan. International Data Transfers. The Company and the Designated Broker are based in the United States. Your country or jurisdiction may have different data privacy laws and protections than the United States. For example, the European Commission has issued a limited adequacy finding with respect to the United States that applies only to the extent companies register for the EU-U.S. Privacy Shield program (which the Company currently is not). The Company’s legal basis, where required, for the transfer of Data is your consent. Data Retention. The Company will hold and use Data only as long as is necessary to implement, administer and manage your participation in the Plan, or as required to comply with legal or regulatory obligations, including under tax, exchange control, labor and securities laws. Voluntariness and Consequences of Consent Denial or Withdrawal. Participation in the Plan is voluntary, and you are providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your salary from or employment and career with the Employer will not be affected; the only consequence of refusing or you withdrawing consent is that the Company would not be able to grant the Restricted Stock Units or other equity awards to you or administer or maintain such awards. Data Subject Rights. You may have a number of rights under data privacy laws in your jurisdiction. Depending on where you are based, such rights may include the right to (i) request access or copies of Data the Company processes, (ii) rectification of incorrect Data, (iii) deletion of Data, (iv) restrictions on processing of Data, (v) portability of Data, (vi) lodge complaints with competent authorities in your jurisdiction, and/or (vii) receive a list with the names and addresses of any potential recipients of Data. To receive clarification regarding these rights or to exercise these rights, you can contact the local human resources representative. By accepting the Restricted Stock Units and indicating consent via the Company’s acceptance procedure, you are declaring agreement with the data processing practices described herein and consent to the collection, processing and use of Data by the Company and the transfer of Data to the recipients mentioned above, including recipients located in countries which do not adduce an adequate level of protection from a European (or other non-U.S.) data protection law perspective, for the purposes described above. Finally, you understand that the Company may rely on a different basis for the processing or transfer of Data in the future and/or request that you provide another data privacy consent. If applicable, you agree that upon request of the Company or the Employer, you will provide an executed acknowledgement or data privacy consent form (or any other agreements or consents) that the Company and/or the Employer may deem necessary to obtain from you for the purpose of administering your participation in the Plan in compliance with the data privacy laws in your country, either now or in the future. You understand and agree that you will not be able to participate in the Plan if you fail to provide any such consent or agreement requested by the Company and/or the Employer. |
Insider Trading Restrictions / Market Abuse Laws | You acknowledge that, depending on your or your broker’s country or the country in which shares of Common Stock are listed, you may be subject to insider trading restrictions and/or market abuse laws, which may affect your ability to accept, acquire, sell or otherwise dispose of shares of Common Stock, rights to shares of Common Stock (e.g., Restricted Stock Units) or rights linked to the value of shares of Common Stock under the Plan during such times that you are considered to have “inside information” regarding the Company (as defined by the laws or regulations in the applicable jurisdictions or your country). Local insider trading laws and regulations may prohibit the cancellation or amendment of orders you placed before you possessed inside information. Furthermore, you could be prohibited from (i) disclosing the inside information to any third party and (ii) “tipping” third parties or causing them otherwise to buy or sell securities. You should keep in mind that third parties include fellow employees. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. You understand you are responsible for ensuring compliance with any restrictions and should consult with your personal legal advisor on this matter. |
Severability | The provisions of this Agreement are severable and if any one or more provisions are determined to be invalid or otherwise enforceable, in whole or in part, the remaining provisions shall continue in effect. |
Applicable Law | This Agreement will be interpreted and enforced with respect to issues of contract law under the laws of the State of Delaware (except their choice of law provisions). For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or this Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of California and agree that such litigation shall be conducted only in the courts of San Mateo County, California, U.S.A. or the federal courts for the United States for the Northern District of California, and no other courts, where this grant is made and/or to be performed. |
The Plan and Other Agreements | The text of the Plan is incorporated in this Agreement by reference. A copy of the Plan is available on the Company’s intranet or by request to the Stock Services Department. This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Award. Any prior agreements, commitments or negotiations concerning this Award are superseded. This Agreement may be amended only by another written agreement between the parties. |
Entity | Jurisdiction |
Equinix (Australia) Enterprises Holdings Pty Limited | Australia |
Equinix (Australia) Enterprises Pty Limited | Australia |
Equinix Australia Pty Limited | Australia |
McLaren Pty Limited | Australia |
Metronode (ACT) Pty Limited | Australia |
Metronode (NSW) Pty Ltd | Australia |
Metronode C1 Pty Limited | Australia |
Metronode Group Pty Limited | Australia |
Metronode Investments Pty Limited | Australia |
Metronode M2 Pty Ltd | Australia |
Metronode P2 Pty Limited | Australia |
MGH Pegasus Pty Ltd | Australia |
Equinix Australia National Pty. Ltd. | Australia |
Metronode S2 Pty Ltd | Australia |
MGH Bidco Pty Limited | Australia |
MGH Finco Pty Limited | Australia |
MGH Holdco Pty Ltd | Australia |
McLaren Unit Trust | Australia |
Equinix do Brasil Soluções de Tecnologia em Informática Ltda. | Brazil |
Equinix do Brasil Telecomunicações Ltda. | Brazil |
Equinix Colombia, Inc. | British Virgin Islands |
Equinix (Bulgaria) Data Centers EOOD | Bulgaria |
Equinix (Canada) Enterprises Ltd. | Canada |
Equinix Canada Ltd. | Canada |
CHI 3, LLC | Delaware, U.S. |
DCI Management, Inc. | Delaware, U.S. |
DCI Tech Holdings Infomart, LLLP | Delaware, U.S. |
Equinix (EMEA) Management, Inc. | Delaware, U.S. |
Equinix (Government) LLC | Delaware, U.S. |
Equinix (US) Enterprises, Inc. | Delaware, U.S. |
Equinix (Velocity) Holding Company | Delaware, U.S. |
Equinix Impact LLC | Delaware, U.S. |
Equinix LLC | Delaware, U.S. |
Equinix Pacific LLC | Delaware, U.S. |
Equinix Professional Services, Inc. | Delaware, U.S. |
Equinix Government Solutions LLC | Delaware, U.S. |
Equinix RP II LLC | Delaware, U.S. |
Equinix South America Holdings, LLC | Delaware, U.S. |
Infomart Dallas GP, LLC | Delaware, U.S. |
Infomart Dallas, LP | Delaware, U.S. |
Infomart Holdings, LLC | Delaware, U.S. |
Entity | Jurisdiction |
Infomart Venture, LLC | Delaware, U.S. |
LA4, LLC | Delaware, U.S. |
Moran Road Partners, LLC | Delaware, U.S. |
NY2 Hartz Way, LLC | Delaware, U.S. |
SV1, LLC | Delaware, U.S. |
Switch & Data Facilities Company LLC | Delaware, U.S. |
Switch & Data LLC | Delaware, U.S. |
Switch & Data MA One LLC | Delaware, U.S. |
Switch & Data WA One LLC | Delaware, U.S. |
Switch & Data/NY Facilities Company LLC | Delaware, U.S. |
Switch and Data CA Nine LLC | Delaware, U.S. |
Switch And Data NJ Two LLC | Delaware, U.S. |
Switch and Data Operating Company LLC | Delaware, U.S. |
Switch and Data VA Four LLC | Delaware, U.S. |
VDC I, LLC | Delaware, U.S. |
VDC II, LLC | Delaware, U.S. |
VDC III, LLC | Delaware, U.S. |
VDC IV, LLC | Delaware, U.S. |
VDC V, LLC | Delaware, U.S. |
VDC VI, LLC | Delaware, U.S. |
VDC VII, LLC | Delaware, U.S. |
VDC VIII, LLC | Delaware, U.S. |
Equinix Hyperscale (LP) LLC | Delaware, U.S. |
Equinix Hyperscale (GP) LLC | Delaware, U.S. |
Equinix (Finland) Enterprises Oy | Finland |
Equinix (Finland) Oy | Finland |
Equinix (France) Enterprises SAS | France |
Equinix (Real Estate) Holdings SC | France |
Equinix (Real Estate) SCI | France |
Equinix France SAS | France |
Equinix (Germany) Enterprises GmbH | Germany |
Equinix (Germany) GmbH | Germany |
Equinix (Real Estate) GmbH | Germany |
Upminster GmbH | Germany |
Equinix Hyperscale 1 (FR9) GmbH | Germany |
Equinix Hyperscale 1 (FR11) GmbH | Germany |
Equinix (Hong Kong) Enterprises Limited | Hong Kong |
Equinix Hong Kong Limited | Hong Kong |
CHI 3 Procurement, LLC | Illinois, U.S. |
Equinix (Ireland) Enterprises Limited | Ireland |
Equinix (Ireland) Limited | Ireland |
Equinix (Italia) Enterprises S.r.l. | Italy |
Equinix Italia S.r.l. | Italy |
Open Hub Med Societa Consortile a responsabilita limitata | Italy |
Equinix (Japan) Enterprises K.K. | Japan |
Entity | Jurisdiction |
Equinix (Japan) Technology Services K.K. | Japan |
Equinix Japan K.K (in Kanji) | Japan |
Metronode New Zealand Limited | New Zealand |
Equinix Muscat LLC | Oman |
Equinix Middle East Services LLC | Oman |
Equinix (China) Investment Holding Co., Ltd (亿利互连 (中国) 投资有限公司) | People’s Republic of China |
Equinix Information Technology (Shanghai) Co., Ltd. (亿利互连信息技术 (上海) 有限公司) | People’s Republic of China |
Equinix WGQ Information Technology (Shanghai) Co., Ltd. (亿利互连 (上海) 通讯科技有限公司) | People’s Republic of China |
Equinix YP Information Technology (Shanghai) Co., Ltd. (亿利互连数据系统 (上海) 有限公司) | People’s Republic of China |
Gaohong Equinix (Shanghai) Information Technology Co., Ltd (高鸿亿利 (上海) 信息技术有限公司) | People’s Republic of China |
Equinix (Poland) Technology Services sp. z o.o. | Poland |
Equinix (Poland) Enterprises sp. z o.o. | Poland |
Equinix (Poland) sp. z o.o. | Poland |
Equinix (Portugal) Data Centers, S.A. | Portugal |
Equinix II (Portugal) Enterprises Data Centers, Unipessoal Lda | Portugal |
Equinix Korea LLC | Republic of Korea |
Equinix (Singapore) Enterprises Pte. Ltd. | Singapore |
Equinix Asia Pacific Holdings Pte. Ltd. | Singapore |
Equinix Asia Pacific Pte. Ltd. | Singapore |
Equinix Singapore Holdings Pte. Ltd. | Singapore |
Equinix Singapore Pte. Ltd. | Singapore |
Equinix (Spain) Enterprises, S.L.U. | Spain |
Equinix (Spain), S.A.U. | Spain |
Equinix (Sweden) AB | Sweden |
Equinix (Sweden) Enterprises AB | Sweden |
Equinix (Switzerland) Enterprises GmbH | Switzerland |
Equinix (Switzerland) GmbH | Switzerland |
EMEA Hyperscale 1 C.V. | The Netherlands |
Equinix Hyperscale 1 Holdings B.V. | The Netherlands |
Equinix (EMEA) Acquisition Enterprises B.V. | The Netherlands |
Equinix (EMEA) B.V. | The Netherlands |
Equinix (Netherlands) B.V. | The Netherlands |
Equinix (Netherlands) Enterprises B.V. | The Netherlands |
Equinix (Netherlands) Holdings B.V. | The Netherlands |
Equinix (Real Estate) B.V. | The Netherlands |
Virtu Secure Webservices B.V. | The Netherlands |
Equinix (EMEA) Hyperscale Services B.V. | The Netherlands |
Equinix Turkey Data Merkezi Üretim Inşaat Sanayi ve Ticaret Anonim Sirketi | Turkey |
Equinix Turkey Enterprises Data Merkezi Üretim Inşaat Sanayi ve Ticaret Anonim Sirketi | Turkey |
Equinix Middle East FZ-LLC | United Arab Emirates |
Equinix Hyperscale 1 (LD11) Limited | United Kingdom |
Equinix (Services) Limited | United Kingdom |
Entity | Jurisdiction |
Equinix (UK) Enterprises Limited | United Kingdom |
Equinix (UK) Limited | United Kingdom |
Equinix Hyperscale (France) Holdings SAS | France |
Equinix Hyperscale 1 (PA9) SAS | France |
Equinix Hyperscale 1 (PA8) SAS | France |
Equinix Hyperscale 1 (UK) Financing Limited | United Kingdom |
Equinix Hyperscale 1 (LD13) Limited | United Kingdom |
Equinix Canada (TR3) Ltd. | Canada |
Equinix (MA5) Limited | United Kingdom |
Equinix (Poland) Services sp. z o.o | Poland |
Equinix Hyperscale 1 (TY14) TMK | Japan |
Equinix Hyperscale 1(OS2) TMK | Japan |
Equinix Hyperscale 1 (TY12)TMK | Japan |
Equinix Information Technologies (India) Private Limited | India |
Equinix Mexico Holdings, S. de R.L. de C.V. | Mexico |
Packet Host, Inc. | Delaware |
PacketHost, Inc., | Philippines |
Packet Host, Ltd. | Japan |
Packet Host Pte. Ltd. | Singapore |
Equinix MX Sales, S. de R.L. de C.V., CO 0332, | Mexico |
Equinix Apodaca, S. de R.L. de C.V. | Mexico |
Equinix Queretaro, S. de R.L. de C.V. | Mexico |
Equinix MX Services, S.A. de C.V. | Mexico |
Equinix APAC 1 Hyperscale Holdings 1 Pte. Ltd. | Singapore |
Equinix APAC 1 Hyperscale Holdings 2 Pte. Ltd. | Singapore |
Equinix (FR-A) GmbH | Germany |
Mertus 599. GmbH | Germany |
Equinix Hyperscale (GP) Pte. Ltd. | Singapore |
Equinix APAC Hyperscale 1 (LP) LLC | Delaware |
Equinix (APAC) Hyperscale Services Pte. Ltd. | Singapore |
APAC 1 Hyperscale LP | Singapore |
Equinix APAC 1 Hyperscale Holdings Pte. Ltd. | Singapore |
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