EX-10.1



 Exhibit 10.1 

 
 



 
 May 9, 2013 
 Mr. Carl Eschenbach 
 c/o VMware, Inc. 

3401 Hillview Ave 
 Palo Alto, CA 94304

 Dear Carl: 
 On behalf of the Board
of Directors (the “Board”) of Palo Alto Networks, Inc. (the “Company”), we are pleased to inform you that it is the intention of the Nominating and Governance Committee of our Board to nominate you for election as a
member of our Board and our Audit Committee. 
 As you are aware, the Company is a Delaware corporation and therefore your rights and duties as
a Board member of the Company are prescribed by Delaware law, our charter documents as well as by the policies established by our Board from time to time. Your duties and responsibilities will be commensurate of those of a director of a publicly
traded company. In addition, you may also be requested to serve as a director of one or more of our subsidiaries in which case you may be subject to other laws while serving in such a capacity. 

From time to time, our Board may establish certain other committees to which it may delegate certain duties. You will be appointed by the Board to serve
on at least one committee (initially, the Audit Committee). In addition to committee meetings, which shall be convened as needed, our Board meetings are generally held quarterly at the Company’s offices in Santa Clara, California. We would hope
that your schedule would permit you to attend all of the meetings of the Board and any committees of which you are a member. In addition, from time to time, there may be telephonic meetings to address special matters. 

It is expected that during the term of your Board membership with the Company you will not engage in any other employment, occupation, consulting or
other business activity that competes with the business in which the Company is now involved in or becomes involved in during the term of your service to the Company, nor will you engage in any other activities that conflict with your obligations to
the Company. 
 If you decide to join the Board, it will be recommended at the time of your election as a member of the Board that the Company
grant you a restricted stock unit award in the amount of 16,000 shares of common stock (the “Award”) in consideration for your service as a member of the Board. The Award shares will vest over three years, with 1/3 of the shares
subject to the Award grant vesting on the first anniversary of the grant date, and the remaining shares vesting equally over the next two years on a quarterly basis, subject to you continuing to serve as a Board member on each vesting date.

 Following a Change in Control (defined below), all shares subject to the Award granted in accordance with the foregoing provisions shall
fully vest and become immediately exercisable. “Change of Control” shall mean: (i) the sale or other disposition of all or substantially all of the assets of the Company; (ii) any sale or exchange of the capital stock of
the Company by the stockholders of the Company in one transaction or series of related transactions where more than fifty percent (50%) of the outstanding voting power of the Company is acquired by a person or entity or group of related persons
or entities; (iii) any reorganization, consolidation or merger of the Company where the outstanding voting securities of the Company immediately before the transaction represent or are converted into less than fifty percent (50%) of the
outstanding voting power of the surviving entity (or its parent corporation) immediately after the transaction; or (iv) the consummation of the acquisition of fifty-one percent (51%) or more of the outstanding stock of the Company pursuant
to a tender offer validly made under any federal or state law (other than a tender offer by the Company). 
  
 



 








			
	 Mr. Carl Eschenbach
 May 9,
2013
  Page
 2

	  	





  
 In addition to the Award, you
will be eligible to receive annual restricted stock unit equity awards with a combined value of $220,000 on the date of each annual meeting of stockholders, subject to your continuing service on the Board and the Audit Committee. Each annual
restricted stock unit equity award is expected to vest over one year on a quarterly basis. 
 The payment of compensation to Board members is
subject to many restrictions under applicable law, and as such, you should be aware that the compensation set forth above is subject to such future changes and modifications as the Board or its committees may deem necessary or appropriate. In
addition, please note that unless otherwise approved by our Board or required under applicable law, directors of our subsidiaries shall not be entitled to any compensation. 
 You shall be entitled to reimbursement for reasonable expenses incurred by you in connection with your service to the Company and attendance of Board and committee meetings in accordance with the
Company’s established policies. 
 Please note that nothing in this letter or any agreement granting you equity should be construed to
interfere with or otherwise restrict in any way the rights of the Company, its Board or stockholders from removing you from the Board or any committee in accordance with the provisions of applicable law. Furthermore, except as otherwise provided to
other non-employee Board members or required by law, the Company does not intend to afford you any rights as an employee, including without limitation, the right to further employment or any other benefits. 

We hope that you find the foregoing terms acceptable. You may indicate your agreement with these terms by signing and dating both the enclosed duplicate
and original letter and returning them to me. By signing this letter you also represent that the execution and delivery of this agreement and the fulfillment of the terms hereof will not require the consent of another person, constitute a default
under or conflict with any agreement or other instrument to which you are bound or a party. 
 On behalf of the Company it gives us great
pleasure to welcome you as a member of our Board. We anticipate your leadership and experience shall make a key contribution to our success at this critical time in our growth and development. 

Yours very truly, 
 /s/ Mark McLaughlin

 Mark McLaughlin 
 Chief Executive
Officer 
 Palo Alto Networks, Inc. 

Acknowledged and agreed to 
 May 15, 2013

  

	
	 /s/ Carl Eschenbach

	Carl Eschenbach