Edgar Filing: TERADATA CORP /DE/

DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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LOGO

NOTICE OF 2016 ANNUAL MEETING

AND PROXY STATEMENT

Message to Stockholders

March 4, 2016

Dear Fellow Stockholder:

I am pleased to invite you to attend Teradata Corporation’s 2016 Annual Meeting of Stockholders on April 26, 2016. The meeting will begin promptly at 8:00 a.m. local time at the Terry Executive Education Center, 3475 Lenox Road NE, Atlanta, Georgia 30326.

This proxy statement, which includes a notice of the 2016 annual meeting, tells you more about the agenda and procedures for the meeting. It also describes how our Board of Directors operates and gives information about director candidates and general compensation and corporate governance matters.

Since last year’s annual meeting, Teradata has been in a transition period and has taken a number of actions to increase shareholder value, including the development of a business transformation plan. Through the implementation of this plan, we intend to: expand our core data warehouse market opportunity by making it easier for customers to buy our solutions and by providing Teradata data warehousing in the public cloud; focus on big data solutions that can contribute revenue growth and increase our position in the analytic ecosystem; enhance our value-added services and extend the market opportunity for such services; and evolve our go-to-market strategy. We have also been taking steps to meaningfully reduce our cost structure and to exit our marketing applications business, while also actively engaging in share repurchase activities.

In addition, as described on page 35 of this proxy statement, we greatly value the opinions of our stockholders and have modified our executive compensation program specifically to address concerns raised during the course of our stockholder outreach efforts. These changes further connect pay and performance and enhance the alignment of our executive compensation program with your long-term interests. We believe that Teradata gains valuable insights into your perspectives through our ongoing efforts to engage with stockholders, and we appreciate the feedback provided to our management team and Board of Directors on many topics, including our operations, compensation and governance.

Our Board of Directors continues to evolve, and we remain committed to ensuring that it includes a highly qualified and diverse group of directors who are well-equipped to oversee the success of Teradata’s business and effectively represent your interests. We encourage you to review the qualifications, skills and experience that we have identified as important qualifications and attributes for each of our directors as described beginning on page 6 of this proxy statement.

Michael Koehler, Teradata’s President and Chief Executive Officer, and I look forward to seeing you at the annual meeting. If you plan to attend, please send an email to investor.relations@teradata.com to receive a meeting reservation request form. In addition, you are welcome to share your thoughts or concerns with us on any topic. Communications can be addressed to directors in care of the Corporate Secretary, Laura Nyquist, at 10000 Innovation Drive, Dayton, Ohio 45342 or by email at the address listed above.

Every vote is important. Whether or not you plan to attend the annual meeting, I urge you to authorize your proxy as soon as possible so that your stock may be represented at the meeting.

We value your support and thank you for your commitment to Teradata.

Sincerely,

James M. Ringler

Chairman of the Board

TERADATA CORPORATION

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TIME

8:00 a.m. local time

DATE

Tuesday, April 26, 2016

PLACE

Terry Executive Education Center

3475 Lenox Road NE, Atlanta, Georgia 30326

PURPOSE

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Elect Messrs. Fu, Gianoni, and Lund to serve as Class III directors for three-year terms expiring at the 2019 annual meeting of stockholders and to hold office until their respective successors are duly elected and qualified;

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Consider and vote upon the approval of the amended and restated Teradata 2012 Stock Incentive Plan;

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Advisory (non-binding) vote to approve executive compensation (a “say-on-pay” vote);

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Vote on the ratification of the appointment of our independent registered public accounting firm for 2016; and

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Transact such other business as may properly come before the meeting and any adjournment or postponement of the meeting by or at the direction of the Board of Directors.

OTHER IMPORTANT INFORMATION

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Record holders of Teradata common stock at the close of business on February 26, 2016, may vote at the meeting.

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Your shares cannot be voted unless they are represented by proxy or in person by the record holder at the meeting. Even if you plan to attend the meeting, please submit a proxy to ensure that your shares are represented at the meeting.

INTERNET AVAILABILITY

Important Notice Regarding the Availability of Proxy Materials for the 2016 Annual Meeting of Stockholders to Be Held on April 26, 2016: This notice of the 2016 annual meeting of stockholders and proxy statement, our 2015 annual report, and form of proxy and voting instruction card are available at http://www.proxyvote.com.

By order of the Board of Directors,

Laura Nyquist

General Counsel and Secretary

March 4, 2016

LOGO

10000 Innovation Drive

Dayton, OH 45342

PROXY STATEMENT

General Information

On behalf of the Board of Directors of Teradata Corporation, a Delaware corporation (“Teradata”, the “Company”, “we” or “us”), we are requesting your proxy for the 2016 annual meeting of stockholders and any adjournments or postponements that follow. The meeting will be held at 8:00 a.m. local time, on April 26, 2016, at the Terry Executive Education Center, 3475 Lenox Road NE, Atlanta, Georgia 30326. At the meeting, we will: (1) consider the election of Messrs. Fu, Gianoni, and Lund as Class III directors for three-year terms expiring in 2019; (2) consider and vote upon the approval of the amended and restated Teradata 2012 Stock Incentive Plan; (3) vote on an advisory (non-binding) basis to approve executive compensation as disclosed in this proxy statement (a “say-on-pay” vote); (4) vote on the ratification of the appointment of our independent registered public accounting firm for 2016; and (5) transact such other business as may properly come before the meeting and any adjournment or postponement thereof.

This proxy statement contains information about the 2016 annual meeting, as well as information regarding the voting process, director elections, our corporate governance programs, and executive and director compensation, among other things. We are furnishing this proxy statement together with our 2015 annual report and form of proxy and voting instruction card (“proxy card”). Proxy materials for the 2016 annual meeting of stockholders are being made available in printed form on or about March 18, 2016. They will be available online on or about March 19, 2016.

YOUR VOTE IS IMPORTANT!

Whether or not you plan to attend the annual meeting, please vote your shares as soon as possible by phone, Internet, or mail if you are receiving paper proxy materials. By using the Internet or phone voting methods, you help us reduce costs and respect the environment. Both are fast, convenient, and environmentally-friendly.

If you are a stockholder of record (i.e., you directly hold your common stock through an account with our transfer agent, Computershare Investor Services), you can vote your shares using one of the following three methods. If you are a beneficial owner (i.e., you indirectly hold your common stock through a nominee such as a bank or broker), you can vote your shares using the methods provided by your nominee.

VOTE BY INTERNET

http://www.proxyvote.com

Use the Internet to transmit your voting instructions and for electronic delivery of information.

VOTE BY PHONE

1-800-690-6903

Use any touch-tone telephone to transmit your voting instructions.

VOTE BY MAIL

Vote Processing, c/o Broadridge,
51 Mercedes Way, Edgewood, NY 11717

If you receive paper proxy materials, mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to the address shown above.

Who may vote at the meeting?

Only stockholders of record may vote at the meeting. A stockholder of record is a stockholder as of the close of business on February 26, 2016, the record date for the meeting. On the record date, there were 128,917,518 shares of common stock outstanding.

How many votes do I have?

For each share of common stock you own, you are entitled to cast one vote on each director candidate submitted for election and to cast one vote on each other matter properly brought before the meeting.

When will I receive my proxy materials?

Proxy materials for the 2016 annual meeting of stockholders are being made available in printed form on or about March 18, 2016. They will be available online on or about March 19, 2016.

How do I access my proxy materials?

Notice and Access. Proxy materials (including our 2015 annual report, notice of the 2016 annual meeting of stockholders and proxy statement, and proxy card) are being made available via the Internet pursuant to the “notice and access” rules of the Securities and Exchange Commission (“SEC”). A Notice of Internet Availability of Proxy Materials (“Notice”) is being mailed to most of our record and beneficial stockholders. The Notice includes instructions on how to access the proxy materials on the Internet or request printed copies of these materials. To receive future proxy materials by mail or email, follow the instructions included with the Notice. If you previously elected to receive materials via mail or email delivery, you will not receive the Notice, but you will receive your materials via the delivery method you requested.

Electronic Delivery. At their request, many stockholders are receiving an email providing them with links to receive the Notice and Internet access to the proxy materials rather than receiving a printed copy of the Notice or printed proxy materials.

Paper Copies. If you have previously requested paper copies of your proxy materials, or are otherwise required to receive paper copies, you will receive the 2016 proxy materials, including notice of the meeting, in printed form unless you consent to receive these documents electronically in the future.

How do I receive my proxy materials electronically?

If you are a stockholder of record (i.e., you directly own your common stock through an account with our transfer agent, Computershare Investor Services), you can choose to access your Teradata proxy materials electronically and save the cost of producing and mailing a Notice and other documents by following the instructions provided at http://www.investordelivery.com or by following the prompt if you choose to authorize your proxy over the Internet. You must provide your twelve-digit control number listed on your Notice or proxy card to make this election.

Your election to receive proxy materials by electronic access will remain in effect until you revoke your consent at http://www.proxyvote.com, or your consent is deemed to be revoked under applicable law. You must provide your twelve-digit control number to revoke your consent.

If you are a beneficial owner (i.e., you indirectly hold your common stock through a nominee such as a bank or broker), please review the information provided by your nominee for instructions on how to elect to view future proxy statements and annual reports over the Internet.

Please keep in mind that choosing electronic delivery saves the Company

and its stockholders money and preserves natural resources.

How do I obtain a separate set of proxy materials?

To save costs, only one set of proxy materials is being printed and mailed to stockholders who have requested printed copies and share an address, unless otherwise requested or required under applicable law. If you have multiple Teradata common stock record accounts and/or share an address with a family member who is a Teradata stockholder and want to receive more than one copy of the Notice and/or proxy materials, you may contact our mailing agent, Broadridge Financial Solutions, at Broadridge Householding Department, 51 Mercedes Way, Edgewood, New York, 11717 (phone: 1-800-542-1061). Broadridge will mail you a separate copy of the proxy materials and will remove you from the householding program within thirty days after receipt of this request.

How can I vote my shares of Teradata stock?

Your vote is important. Your shares can be voted at the annual meeting only if you are a record stockholder and present in person or represented by proxy. Even if you plan to attend the meeting, we urge you to authorize your proxy in advance. You may vote your shares by authorizing a proxy over the Internet or by telephone. In addition, if you received paper copies of the proxy materials by mail, you can also submit a proxy by mail by following the instructions on the proxy card. Voting your shares by authorizing a proxy over the Internet, by telephone or by written proxy card will ensure your representation at the annual meeting regardless of whether you attend in person.

If you are a stockholder of record, please authorize your proxy electronically by going to the http://www.proxyvote.com website or by calling the toll-free number (for residents of the United States and Canada) listed on your Notice and proxy card. Please have your Notice or proxy card in hand when going online or calling. If you authorize your proxy via the Internet, you do not need to return your proxy card. If you choose to authorize your proxy by mail, simply mark your proxy card, and then date, sign and return it in the postage-paid envelope provided.

If you hold your shares beneficially through a nominee (such as a bank or broker), you may be able to authorize your proxy by telephone or the Internet as well as by mail. You should follow the instructions you receive from your nominee to vote these shares.

How do I revoke my proxy for the annual meeting?

You may revoke your proxy at any time before it is voted at the meeting by:

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properly executing and delivering a later-dated proxy (including a telephone or Internet proxy authorization);

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voting by ballot at the meeting; or

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sending a written notice of revocation to the inspectors of election in care of our Corporate Secretary at Teradata Corporation, 10000 Innovation Drive, Dayton, Ohio 45342.

What if I want to vote in person at the meeting?

The method by which you vote and authorize your proxy will in no way limit your voting rights if you later decide to vote in person at the meeting. If you beneficially own your shares through a nominee (such as a bank or broker), you must obtain a proxy executed in your favor from your nominee to be able to vote at the meeting.

What are the requirements for ensuring that my shares are voted by proxy at the meeting?

Your shares will be voted at the meeting as directed by the instructions on your proxy card, voting instructions or electronic proxy if (1) you are entitled to vote, (2) your proxy was properly executed or

properly authorized electronically, (3) we received your proxy prior to the voting deadlines for the annual meeting (April 25, 2016 at 11:59 p.m. for record stockholders who do not vote at the meeting, such time as directed by the nominee for beneficial owners, and April 21, 2016 for participants in our 401(k) savings plan), and (4) you did not revoke your proxy prior to or at the meeting.

How do I vote the shares I hold in the Teradata 401(k) savings plan?

If you are a participant in the Teradata 401(k) savings plan, your proxy includes the number of Teradata common stock units (share interests) allocated to your plan account. You may instruct the trustee how to vote the number of share interests allocated to your plan account. The trustee will vote the share interests allocated to your plan account in accordance with your instructions. If you do not vote your share interests in the Teradata 401(k) savings plan, the trustee will vote the unallocated share interests, as well as any allocated share interests held by the plan, in the same proportion as the share interests for which it received timely voting instructions.

What is considered a quorum to conduct the annual meeting?

To have a quorum necessary to conduct business at the meeting, it is necessary to have shares that represent (in person or by proxy) the holders of a majority of our shares of common stock outstanding on the record date, which is the close of business on February 26, 2016. Shares of common stock represented in person or by proxy (including shares that abstain with respect to a particular proposal to be voted upon and “broker non-votes”) will be counted as present for the purpose of determining whether a quorum exists at the meeting for that proposal. If a quorum is not present, the meeting will be adjourned until a quorum is obtained.

How many votes are required to approve each item?

With respect to Proposal 1 (the election of directors), the affirmative vote of a majority of the voting power present (in person or by proxy) at the meeting and entitled to vote on the election of directors is required to elect each director.

With respect to Proposal 2 (the approval of the amended and restated Teradata 2012 Stock Incentive Plan), the affirmative vote of a majority of the voting power present (in person or by proxy) at the meeting and entitled to vote on such item of business is required to approve the plan.

With respect to Proposal 3 (the advisory “say-on-pay” vote on executive compensation), the affirmative vote of a majority of the voting power present (in person or by proxy) at the meeting and entitled to vote on such question is required to adopt this advisory resolution in accordance with Teradata’s bylaws. However, the results of this vote are not binding on the board, whether or not any resolution is passed under this voting standard.

With respect to Proposal 4 (the ratification of the appointment of the Company’s independent auditors), the affirmative vote of a majority of the voting power present (in person or by proxy) at the meeting and entitled to vote on such item of business is required to ratify the appointment.

Abstentions effectively count as votes “against” the adoption of a proposal and the election of a director. Moreover, if you do not instruct your nominee (such as your bank or broker) how to vote your shares with respect to the election of directors, the approval of the amended and restated Teradata 2012 Stock Incentive Plan, or the advisory vote on executive compensation, the nominee may not vote on these proposals. However, broker “non-votes” will have no effect on the outcome of the vote for any proposal or the election of any director. Broker “non-votes” occur when a nominee returns a properly executed proxy but does not vote on a particular item because the nominee has not received voting instructions from the beneficial owner and, therefore, does not have the authority to vote on a proposal.

How does the Board recommend that I vote my shares?

The Teradata Board of Directors recommends that you vote:

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FOR the election of each of the four Class III director nominees, Messrs. Fu, Gianoni, and Lund (see page 6);

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FOR approval of the amended and restated Teradata 2012 Stock Incentive Plan (see page 76);

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FOR the approval, on an advisory basis, of the compensation of our named executive officers as disclosed in this proxy statement (see page 88); and

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FOR ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2016 (see page 90).

If you submit your proxy without specific voting instructions, your shares represented by that proxy will be voted as recommended by our board. As discussed above, if you hold your shares beneficially through a nominee (such as a bank or a broker) and fail to provide specific voting instructions to that nominee, your shares will not be voted in the election of directors, the approval of the amended and restated stock plan, or the advisory “say-on-pay” vote on executive compensation.

What do I need to do if I want to attend the annual meeting?

If you plan to attend the meeting in person, please send an email to us at investor.relations@teradata.com to request a meeting reservation request form. You may attend the meeting if you are a stockholder of record, hold a proxy for a stockholder of record, or are a beneficial owner of our common stock with evidence of ownership. If you are a beneficial owner (i.e., you hold your common stock through a nominee such as a bank or broker), please include evidence of your ownership of common stock with the form (such as an account statement showing you own Teradata common stock as of the record date). If you do not have a reservation for the meeting, you may still attend if we can verify your stock ownership at the meeting.

We will include the results of the votes taken at the meeting in a Form 8-K filed with the SEC within four business days after the date of the annual meeting or any adjournment or postponement thereof. You may also find information on how to obtain a transcript of the meeting by writing to our Corporate Secretary at Teradata Corporation, 10000 Innovation Drive, Dayton, Ohio 45342.

ELECTION OF DIRECTORS

(Item 1 on Proxy Card)

The Board of Directors is currently divided into three classes. Directors are elected by stockholders for terms of three years and hold office until their successors are elected and qualified. One of the three classes is elected each year to succeed the directors whose terms are expiring. As of the 2016 annual meeting, the terms for the directors in Classes I, II and III of the Board of Directors expire in 2017, 2018 and 2016, respectively.

Messrs. Boykin, Fu, Gianoni, and Lund currently are Class III directors whose terms are expiring at the 2016 annual meeting. In January 2016, Mr. Boykin informed the Board of Directors that he will be retiring at the end of his current term and will not stand for re-election at the 2016 annual meeting. The board has extended its sincerest gratitude to Mr. Boykin for his many years of distinguished service to the Company and decided not to nominate a replacement director for Mr. Boykin at this time. As a result, the size of the Board of Directors will be reduced from eleven members to ten members as of the 2016 annual meeting.

For the reasons described below, each of the remaining Class III directors has been nominated by the board for re-election through the 2019 annual meeting of stockholders and until his successor is elected and qualified.

Proxies solicited by the board will be voted for the election of the nominees, unless you provide a contrary instruction on your proxy. Each of the nominees has indicated his willingness to serve if elected. The board has no reason to believe that these nominees will be unable to serve. However, if one of them should become unavailable, the board may further reduce the size of the board or designate a substitute nominee. If the board designates a substitute, shares represented by proxies will be voted for the substitute nominee.

The Board of Directors recommends that you vote FOR the election
of each of the Class III nominees as a director.

Election of each nominee requires the affirmative vote of a majority of the voting power present (in person or by proxy) at the meeting and entitled to vote on such item. If a nominee does not receive a majority vote, he or she is required to tender their resignation for consideration by the disinterested members of the Board of Directors in accordance with the board’s Corporate Governance Guidelines as described on pages 17 to 18 of this proxy statement. Proxies solicited by the Board of Directors will be voted FOR each nominee, unless you specify otherwise in your proxy.

Director Qualifications

Our Board of Directors currently consists of eleven members who we believe are well-qualified to serve on the board and represent our stockholders’ best interests. As described below under the caption “Selection of Nominees for Directors,” the board and its Committee on Directors and Governance (the “Governance Committee”) select nominees with a view to establishing a Board of Directors that is comprised of members who:

have extensive business leadership experience,

bring diverse perspectives to the board,

are independent and collegial,

have high ethical standards as well as sound business judgment and acumen, and

understand and are willing to make the time commitment necessary for the board to effectively fulfill its responsibilities.

We believe that each of the director nominees and other directors bring these qualifications to our Board of Directors. Moreover, they provide our board with a diverse complement of specific business skills, experience and perspectives, including: extensive financial and accounting expertise, public-company board experience, knowledge of the technology and software industries and of Teradata’s business, experience with companies with a global presence and growth strategies, and extensive operational and strategic planning experience. In addition, the board believes that each of the director nominees and other directors has demonstrated outstanding achievement in his or her professional career, the willingness to participate actively in board activities and share policy-making and strategic thinking experiences, an ability to articulate independent perspectives, make analytical inquiries and take tough positions that challenge management, and a high degree of personal and professional integrity. The following describes the key qualifications, business skills, experience and perspectives that each of our directors brings to the Board of Directors, in addition to the general qualifications described above and information included in the biographical summaries provided below for each director. Based on all of these qualifications and attributes, the board believes that the directors and nominees have the appropriate set of skills to serve as members of the board.

2016 DIRECTOR NOMINEES

Class III Nominees — Current Terms Expiring in 2016:


Director	Key Qualifications and Attributes	Biography

Cary T. Fu Co-founder and retired Chairman and Chief Executive Officer of Benchmark Electronics, Inc.	ü Experience as the chief executive officer and chairman of the board of a publicly-traded global technology company ü Financial expertise and experience as a chief financial officer and certified public accountant ü Experience co-founding and leading a high-growth business organization ü Diverse perspective given Taiwanese heritage and years of experience in Asia	Mr. Fu, age 67, is the co-founder of Benchmark Electronics, Inc. (“Benchmark”), a publicly-held electronics manufacturing services provider. He served as Chairman of the Board of Benchmark from 2009 until his retirement in December 2012 and had been a director of Benchmark since 1990. In December 2011, Mr. Fu retired as Benchmark’s Chief Executive Officer, a position he had held since September 2004. Prior to becoming Chief Executive Officer of Benchmark, he served as its President and Chief Operating Officer from May 2001 to September 2004, Executive Vice President from 1992 to 2001, and Executive Vice President, Financial Administration, from 1990 to 1992. He also serves on the board of directors of Littelfuse, Inc., and is a certified public accountant. He joined our board on July 29, 2008.


Director	Key Qualifications and Attributes	Biography

Michael P. Gianoni President and Chief Executive Officer of Blackbaud, Inc.	ü Experience as the president and chief executive officer of a global, publicly-traded technology company ü Strong operational and leadership skills and business acumen ü Proven track record driving financial performance improvement ü Deep software industry knowledge	Mr. Gianoni, age 55, is the President and Chief Executive Officer of Blackbaud, Inc., a provider of software and services specifically designed for nonprofit organizations, a position he has held since joining the company in January 2014. Previously, Mr. Gianoni was the Executive Vice President and Group President, Financial Institutions, at Fiserv, Inc. (“Fiserv”), a global technology provider serving the financial services industry, from January 2010 to December 2013. He joined Fiserv as President of its Investment Services division in December 2007, where he was responsible for product, technology, sales, finance, operations, and strategy. From 2006 until its acquisition by Fiserv, Mr. Gianoni was Executive Vice President and General Manager of CheckFree Corporation, a leading provider of financial e-commerce solutions. Prior to that time, he held a number of senior management positions at DST Systems Inc., an information processing and software services company. Mr. Gianoni serves as a director of Blackbaud and joined our board on January 27, 2015.

Victor L. Lund Former Non-executive Chairman of the Board of DemandTec, Inc.	ü Significant financial expertise ü Experience as the chief financial officer and chief executive officer of a large business with a high-growth model ü Extensive public-company board experience, particularly on audit committees ü Knowledge of the Company and technology industry through board service	Mr. Lund, age 68, served as the non-executive Chairman of the Board of DemandTec, Inc., a publicly-held, on-demand applications company, from December 2006 until February 2012, and was a member of its board from April 2005 until that time. Mr. Lund served as Chairman of the Board of American Stores Company from 1995 until its acquisition by Albertson’s, Inc. in June 1999, and as Chief Executive Officer of American Stores Company from 1992 until 1999. From 1999 until 2002, he served as Vice Chairman of Albertson’s. Prior to joining American Stores Company in 1977, Mr. Lund was a practicing certified public accountant. He also currently serves on the board of directors of Service Corporation International and has served on a number of publicly-traded company boards, including Del Monte Foods Company from March 2005 until 2011. He joined our board on September 6, 2007.

Other Directors

Class I — Current Terms Expiring in 2017:


Director	Key Qualifications and Attributes	Biography

Nancy E. Cooper Retired Executive Vice President and Chief Financial Officer of CA Technologies	ü Significant financial expertise ü Experience as the chief financial officer of a global, publicly-traded company in the software technology industry ü Strong ethics and compliance focus ü Audit committee experience ü Gender diversity	Ms. Cooper, age 62, served as the Executive Vice President and Chief Financial Officer of CA Technologies (“CA”), an IT management software provider, from August 2006 until her retirement in May 2011. She joined CA in August 2006 with nearly 30 years of finance experience. From 2001 until that time, Ms. Cooper served as Chief Financial Officer for IMS Health Incorporated, the world’s leading provider of market intelligence to the pharmaceutical and healthcare industries. Prior to joining IMS Health, she was the Chief Financial Officer of Reciprocal, Inc., a leading digital rights management and consulting firm. In 1998, she served as a partner responsible for finance and administration at General Atlantic Partners, a private equity firm focused on software and services investments. Ms. Cooper began her career at IBM Corporation where she held increasingly important roles over a 22-year period that focused on technology strategy and financial management. She serves as a director of The Mosaic Company, The Guardian Life Insurance Company of America, and Brunswick Corporation. She also serves as a trustee to the Anita Borg Institute for Women and Technology. Ms. Cooper joined our board on August 1, 2009.

David E. Kepler Retired Executive Vice President, Chief Sustainability Officer and Chief Information Officer of The Dow Chemical Company	ü Experience as the chief information officer of a complex, global company with additional responsibility for corporate sustainability initiatives, risk management and business services operations ü Financial expertise ü Recognized leader in the area of cybersecurity	Mr. Kepler, age 63, served as the Executive Vice President, Chief Sustainability Officer and Chief Information Officer (“CIO”) of The Dow Chemical Company (“Dow”) from 2008 until his retirement in December 2014. Mr. Kepler joined Dow in 1975. He was appointed Vice President and CIO of Dow in 1998 and Corporate Vice President in 2001. At Dow, Mr. Kepler assumed responsibility for Business Services in 2004, was appointed Senior Vice President in 2006, with added responsibilities for the company’s sustainability initiatives, and appointed Executive Vice President in February 2008. He also serves on the board of directors of TD Bank Group and Autoliv, Inc. Mr. Kepler serves as a trustee of the University of California Berkeley and is the board chairman of the Mid-Michigan Innovation Center and previously served on the U.S. National Infrastructure Advisory Council that advises the President on the protection of critical infrastructure and homeland security issues. He joined our board on November 1, 2007.


Director	Key Qualifications and Attributes	Biography

William S. Stavropoulos Chairman Emeritus of the Board of Directors of The Dow Chemical Company	ü Distinguished career with extensive public-company board experience ü Leadership experience as a former chief executive officer and chairman of a major, global company ü Substantial business and strategic acumen ü Knowledge of the Company	Mr. Stavropoulos, age 76, retired as Chairman of the Board of Dow on April 1, 2006. He had served in such capacity since November 2000. Mr. Stavropoulos was the President and Chief Executive Officer of Dow from 1995 to 2000 and was Chairman of the Board, President and Chief Executive Officer from 2002 to November 2004. He is the non-executive chairman of Univar, Inc., a global distributor of commodity and specialty chemicals. In addition, he is on the advisory board for Metalmark Capital LLC, a private equity investment firm, and is a trustee of the Fidelity Equity and High Income Funds. He also serves as a special advisor to Clayton, Dubilier & Rice, Inc., a private equity investment firm and is the president and founder of the Michigan Baseball Foundation. Mr. Stavropoulos served on the boards of Maersk Inc. from July 2002 to 2014 and Tyco International, Inc. from March 2007 until 2013. Mr. Stavropoulos joined our board on September 6, 2007.

Class II — Current Terms Expiring in 2018:


Director	Key Qualifications and Attributes	Biography

James M. Ringler Chairman of Teradata Corporation	ü Experience as the chief executive officer and chairman of the board of publicly-held, global companies ü Extensive experience on public company boards ü An in-depth knowledge of the Company’s business, strategy and management team	Mr. Ringler, age 70, was named Chairman of the Board of Teradata in September 2007. Mr. Ringler previously served as Chairman of the Board of NCR Corporation from July 25, 2005 to September 2007, and served as NCR’s President and Interim Chief Executive Officer from March to August 2005. He served as Vice Chairman of Illinois Tool Works Inc., a multi-billion dollar diversified manufacturer of highly engineered components and industrial systems, from 1999 until he retired in 2004. Prior to joining Illinois Tool Works, from 1997 to 1999, Mr. Ringler was Chairman of Premark International, Inc. He also served as Premark’s Chief Executive Officer from 1995 to 1999 when it merged with Illinois Tool Works. Mr. Ringler serves as a director of Autoliv, Inc., Dow, FMC Technologies, Inc., and John Bean Technologies Corporation and served on the board of Ingredion Incorporated (formerly Corn Products International, Inc.) from 2002 until May 2014. He joined our board on September 6, 2007.


Director	Key Qualifications and Attributes	Biography

Lisa R. Bacus Executive Vice President and Global Chief Marketing Officer for Cigna Corporation	ü Deep marketing expertise with focus on strategic planning and data analytics and knowledge of digital marketing strategies ü Experience as senior executive of large global companies ü Diverse perspective given gender and Hispanic heritage	Ms. Bacus, age 51, is the Executive Vice President and Global Chief Marketing Officer of Cigna Corporation, a global health care products and services company. Prior to joining Cigna, Ms. Bacus was the Executive Vice President and Chief Marketer at American Family Insurance Group, a personal and commercial property and casualty insurance company, from February 2011 until May 2013, and its Vice President, Marketing, from 2008 to 2011. Before joining American Family Insurance, she held a number of marketing management positions with increasing responsibility at the Ford Motor Company from 1986 to 2008. She has served on the board of Shoutlet, Inc., a provider of enterprise social media management software, and currently serves on the board of another privately-held company and a number of non-profit boards. Ms. Bacus joined our board on January 27, 2015.

Michael F. Koehler President and Chief Executive Officer of Teradata Corporation	ü Service as the President and Chief Executive Officer of the Company with extensive knowledge of, and experience with, the software industry and the Company’s operations, strategy and financial position ü Experience as a director of another global, publicly-traded company	Mr. Koehler, age 63, is President and Chief Executive Officer of Teradata. Previously, Mr. Koehler served as Senior Vice President, Teradata Division of NCR Corporation from 2003 to 2007. From September 2002 until March 2003, he was the Interim Teradata Division Leader at NCR. From 1999 to 2002, Mr. Koehler was Vice President, Global Field Operations, Teradata Division, and held management positions of increasingly greater responsibility at NCR prior to that time. He serves as a director of Hertz Global Holdings, Inc. and its subsidiary, Hertz Corporation. He joined our board in August 2007.


Director	Key Qualifications and Attributes	Biography

John G. Schwarz Co-founder and Chief Executive Officer of Visier Inc.	ü Extensive experience within the software and technology industries as the chief executive officer and director of a global, high-technology company ü Operational and strategic planning experience leading a business organization that experienced high growth through acquisitions and organic growth strategies ü Broad global experience and perspective	Mr. Schwarz, age 65, is the founder and Chief Executive Officer of Visier Inc., a business analytics software firm, a position he has held since April 2010. Previously, he served as Chief Executive Officer of SAP Business Objects, a unit of SAP AG, from January 2008 to February 2010, during which time he was a member of the executive board of SAP AG and also served on the board of directors of SAP Business Objects. From September 2005 until its acquisition by SAP AG in January 2008, he served as Chief Executive Officer of Business Objects S.A., a provider of business intelligence software and services. Mr. Schwarz served as President and Chief Operating Officer of Symantec Corporation, a provider of infrastructure security and storage management software, from December 2001 to September 2005. From January 2000 to November 2001, he served as President and Chief Executive Officer of Reciprocal Inc., which provided business-to-business secure e-commerce services for digital content distribution over the Internet. Prior to joining Reciprocal, Mr. Schwarz spent 25 years at IBM Corporation with his last position being General Manager of IBM’s Industry Solutions unit, a worldwide organization focused on building business applications and related services for IBM’s large industry customers. Mr. Schwarz serves as a director of Synopsys, Inc., and Avast Software, and served as a director of SuccessFactors, Inc. from September 2010 until June 2011. He is also a member of the Dalhousie University Advisory Board. He joined our board on September 20, 2010.

No family relationship exists among any of the directors, nominees or executive officers. No arrangement or understanding exists between any director, nominee, or executive officer and any other person pursuant to which any director, nominee or executive officer was selected as a director, nominee or executive officer of the Company.

ADDITIONAL INFORMATION CONCERNING THE BOARD OF DIRECTORS

The Board of Directors oversees the overall performance of the Company on your behalf. Members of the board stay informed of our business by actively participating in numerous board and committee meetings, through discussions with the Chief Executive Officer (“CEO”) and other members of management and staff, and by reviewing other materials and communications provided to them.

Corporate Governance

Our Board of Directors is elected by the stockholders to govern our business and affairs. The board selects the senior management team, which is charged with conducting our business. Having selected the senior management team, the board acts as an advisor to senior management and monitors its performance. The board reviews our strategies, financial objectives, operating plans, major risks, and plans for mitigating such risks. It also plans for management succession of the CEO, as well as other senior management positions, and oversees our compliance efforts.

To support these important duties, the board employs a strong framework of corporate governance practices, including those outlined below:

LOGO

Stockholder Outreach

Stockholder engagement is an important part of our business practices, and we greatly value the input we receive from our stockholders. Teradata Investor Relations and members of Teradata management are in frequent communication with stockholders on a variety of matters, including operations, corporate governance practices and executive compensation. Independent members of the board also engage with stockholders on a regular basis. In 2015, at the direction of the board, Teradata engaged in a robust stockholder outreach effort to better understand and address any concerns stockholders might have relating to the Company’s executive compensation program. In addition to compensation-related matters, a number of corporate governance matters were discussed with our stockholders during the outreach process.

This engagement has been very productive and informative and, accordingly, stockholder interests have been taken into consideration in establishing the Company’s strategic plans and a number of important changes to Teradata’s executive compensation program. As described below on page 36 of the Compensation Discussion and Analysis section of this proxy statement, such changes include, among other things, allocating a much higher percentage of long-term incentives to performance-based equity awards, adding equity awards with a 3-year performance period based on total shareholder return, and providing greater transparency regarding the strategic objectives used in incentive compensation arrangements.

Corporate Governance Guidelines

To help discharge its responsibilities, the Board of Directors has adopted Corporate Governance Guidelines on significant corporate governance issues. These guidelines address, among other things, such matters as director independence, committee membership and structure, meetings and executive sessions, and director selection, retirement, and training. The board’s Corporate Governance Guidelines, which were updated in April 2014, are found on our corporate governance website at http://www.teradata.com/governance-guidelines. The board’s independent directors meet regularly in executive session without management present and, as provided in the Corporate Governance Guidelines, the Board of Directors has selected the Chairman of the Board, who is an independent director, to preside at its executive sessions during 2016.

Board Independence and Related Transactions

We believe that the Company benefits from having a strong and independent board. For a director to be considered independent, the board must determine that the director does not have any direct or indirect material relationship with the Company that would affect his or her exercise of independent judgment. The Board of Directors has established independence standards as part of its Corporate Governance Guidelines. In general, the board must determine whether a director is considered independent, taking into account the independence guidelines of the New York Stock Exchange (“NYSE”) and the factors listed immediately following this paragraph (which are included as Exhibit B, Director Independence Standards, to the board’s Corporate Governance Guidelines referenced above) in addition to those other factors it may deem relevant. No director may qualify as independent unless the board affirmatively determines (i) under the NYSE listing standards, that he or she has no material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us), and (ii) under our independence standards, that the director or director candidate does not have any direct or indirect material relationship with us. Our independence standards include the following minimum criteria:

A director will not be independent if:

(i)

at any time during the last three years, he or she has been an employee of Teradata, or an immediate family member of the director has been an executive officer of Teradata;

(ii)

he or she has received, or has an immediate family member who has received, during any 12-month period within the last three years, more than $120,000 in direct compensation from Teradata, other than certain limited circumstances, including: (a) compensation and other fees paid for service as a director; or (b) compensation received by an immediate family member for service as an employee of Teradata (other than as an executive officer);

(iii)

he or she has certain relationships with any firm that serves as Teradata’s internal or external auditor, including (a) the director is a current partner or employee of such firm; (b) the director has an immediate family member who is a current partner of such firm; (c) the director has an immediate family member who is a current employee of such firm and personally works on Teradata’s audit; or (d) the director or an immediate family member of the director was within the last three years a partner or employee of such a firm and personally worked on Teradata’s audit within that time;

(iv)

at any time within the past three years, the director or his or her immediate family member has been employed as an executive officer of another company where any of Teradata’s present executive officers at the same time serves or served on that company’s compensation committee; or

(v)

he or she is a current employee, or an immediate family member of the director is a current executive officer, of a company that has made payments to, or received payments from, Teradata for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues (in each case, as reported in the other company’s last completed fiscal year).

A director will not be independent if he or she is an employee, or any member of the director’s immediate family is an executive officer, of a company which is indebted to Teradata or to which Teradata is indebted, and the total amount of the indebtedness exceeds the greater of $1,000,000 or 2% of the consolidated annual gross revenues of either company.

A director will not be independent if he or she or any member of the director’s immediate family is an officer, director or trustee of a charitable or other tax-exempt organization, and donations by Teradata during any single fiscal year to the charitable or other tax-exempt organization within the last three years exceeds the greater of $1,000,000 or 2% of the organization’s consolidated annual gross revenues.

A relationship arising solely from a director’s interest in another company or similar entity that is party to a transaction with Teradata will not be considered to be a material relationship with Teradata that would impair the director’s independence if: (i) such interest arises only from: (a) the director’s position as a director, trustee or similar position of such other company or entity, and/or (b) the direct or indirect ownership by the director and the director’s immediate family members, in the aggregate, is less than 10% of the equity or similar ownership interest in such other company or entity; and (ii) the director is not involved in the negotiation of the terms of the transaction with Teradata and does not receive any special benefits as the result of the transaction.

The board’s independence standards also provide for additional criteria for members of the Audit and Compensation and Human Resource Committees as required under applicable NYSE rules.

Our Board of Directors has affirmatively determined that all of our non-employee directors and nominees, namely Mses. Bacus and Cooper, and Messrs. Boykin, Fu, Gianoni, Kepler, Lund, Ringler, Schwarz, and Stavropoulos, meet the NYSE listing independence standards and our independence standards for the board and the committees on which they serve. In making this determination, the board considered transactions in 2014 and 2015 pursuant to which Cigna and its affiliate purchased

data warehouse and marketing applications products and related services from Teradata, and Teradata purchased employee benefit program services, with aggregate sales attributed to such purchases significantly below 2% of the annual revenues of either company. The board concluded that Ms. Bacus’ relationship as an officer of Cigna does not disqualify her from being deemed independent under these standards. There were no other transactions, relationships or arrangements in fiscal year 2015 that required review by the board for purposes of determining director independence.

Board Leadership Structure

While our Corporate Governance Guidelines do not require that our Chairman and Chief Executive Officer positions be separate, our board believes that having separate positions and having an independent director serve as Chairman is the appropriate leadership structure for us at this time and demonstrates our commitment to good corporate governance. Our board is led by an independent Chairman, Mr. Ringler. Our Chief Executive Officer, Mr. Koehler, is the only member of the board who is not an independent director. We believe that this leadership structure enhances the accountability of the Chief Executive Officer to the board, strengthens the board’s independence from management and benefits independent risk oversight of the Company’s day-to-day risk management activities. In addition, separating these roles allows Mr. Koehler to focus his efforts on running our business and managing the Company in the best interests of our stockholders, while we are able to benefit from Mr. Ringler’s prior experience as a chairman of other public company boards.

Board Oversight of Risk

Management is responsible for the Company’s day-to-day risk management activities, and our board’s role is to engage in informed risk oversight. In fulfilling this oversight role, our Board of Directors focuses on understanding the nature of our enterprise risks, including our operations and strategic direction, as well as the adequacy of our risk management process and overall risk management system. The board’s committee structure and the collective knowledge and experience of its members promotes a broad perspective, open dialogue and useful insights regarding risk, thereby increasing the effectiveness of the board’s role in risk oversight. There are a number of ways our board performs this function, including the following:

•

at its regularly scheduled meetings, the board receives management updates on our business operations, financial results, and strategy and discusses risks related to the business;

•

the Audit Committee assists the board in its oversight of risk management by overseeing the Company’s enterprise risk management process and discussing with management, particularly, the Chief Financial Officer, Vice President, Enterprise Risk and Assurance Services, Chief Operating Officer, and Chief Ethics, Compliance & Privacy Officer, Director, Corporate Security, and the Company’s guidelines and policies regarding financial and enterprise risk management and risk appetite, including: (i) major risk exposures such as, for example, financial, cybersecurity, data privacy, business continuity, and legal and regulatory risks, and the steps management has taken to monitor and control such exposures; and (ii) internal audit and ethics and compliance updates, as well as whistleblower updates, if any; and

•

through management updates and committee reports, the board monitors our risk management activities, including the enterprise risk management process, risks relating to our compensation programs, and financial and operational risks being managed by the Company.

Compensation Risk Assessment

Based on an analysis conducted by management and reviewed by the Board of Directors, we do not believe that our compensation programs for employees are reasonably likely to have a material adverse effect on the Company.

Executive Management Succession Planning

The Board of Directors has in place an effective planning process to assess successors to the Chief Executive Officer and other members of executive management. The Compensation and Human Resource Committee, in consultation with the CEO, annually reports to the board on management succession planning. The entire board works with the Compensation and Human Resource Committee and the CEO to evaluate potential successors to the CEO and other members of executive management on a planned and unplanned basis. The CEO annually provides to the Compensation and Human Resource Committee his recommendations and evaluations of potential successors, along with a review of any development plans recommended for such individuals.

Code of Ethics

We have a Code of Conduct that sets the standard for ethics and compliance for all of our employees, including our officers, directors, chief accounting officer, and corporate controller. Our Code of Conduct is available on our corporate governance website at http://www.teradata.com/code-of-conduct.

Section 16(a) Beneficial Ownership Reporting Compliance

To the best of our knowledge, during 2015, all of our executive officers and directors timely filed the reports required under Section 16(a) of the Securities Exchange Act of 1934.

Meetings and Meeting Attendance

The board and its committees met a total of 31 times last year. In 2015, each of the directors attended 75% or more of the total number of meetings of the board and the committee(s) on which he or she serves. In addition, under the board’s Corporate Governance Guidelines, our directors are expected to attend our annual meeting of stockholders each year. All of our directors attended the 2015 annual meeting of stockholders.

Selection of Nominees for Directors

The Board of Directors and the Governance Committee are responsible for recommending candidates for membership to the board. The director selection process and director qualification guidelines are described in detail in the board’s Corporate Governance Guidelines, which are posted on our corporate governance website at http://www.teradata.com/governance-guidelines.

In determining candidates for nomination, the Governance Committee will seek the input of the Chairman of the Board and the CEO and will consider individuals recommended for board membership by our stockholders in accordance with our bylaws and applicable law. In general, we desire to have a balanced group of directors that can perpetuate the Company’s long-term success and represent stockholder interests generally through the exercise of sound business judgment using its diversity of experiences and perspectives.

As part of the selection process, the board and the Governance Committee use the qualification factors listed in our Corporate Governance Guidelines and examine candidates’ business skills and experience, personal integrity, judgment, and ability to devote the appropriate amount of time and energy to serving the best interests of stockholders, in addition to the objectives and desired composition of the board as a whole and the Company’s current and future needs. Although we do not have a formal diversity policy, the Governance Committee and the board also consider the diversity needs of the board. Such considerations include the desire for diverse perspectives that can be gained through different professional experiences, backgrounds, and education, as well as gender, race or ethnic diversity. As described under the caption “Director Qualifications” on pages 6 to 7 of this proxy statement, we believe our directors have very diverse perspectives, business skills, experience, and backgrounds.

Stockholders wishing to recommend individuals for consideration as directors should submit their suggestions in writing to the Corporate Secretary of the Company in accordance with the provisions of our bylaws which require the recommending stockholder to provide, among other things, the candidate’s name, age, residential and business contact information, detailed biographical data and qualifications for service as a board member, the class or series and number of shares of Teradata’s capital stock (if any) which are owned beneficially or of record by the candidate, a document signed by the candidate indicating the candidate’s willingness to serve, if elected, and evidence of the stockholder’s ownership of our stock. Recommendations by stockholders that are made in this manner will be evaluated in the same manner as other candidates. Stockholders who intend to nominate directors for election at our next annual meeting of stockholders must follow the procedures described in our bylaws, which are available on our corporate governance website at http://www.teradata.com/articles-and-bylaws. See “Procedures for Stockholder Proposals and Nominations” on page 96 of this proxy statement for further details regarding how to nominate directors.

The directors nominated by the Board of Directors for election at the 2016 annual meeting were recommended by each of the members of Governance Committee following the process described above. See “Director Qualifications” and “Nominees” on pages 6 through 8 of this proxy statement for further details regarding the reasons and director attributes supporting these nominations. All of these candidates for election are currently serving as our directors and have been determined by the board to be independent.

Under the board’s Corporate Governance Guidelines, if any director who is nominated for election at the 2016 annual meeting is not re-elected by the required majority vote, such director is required to promptly offer his or her resignation. The Board of Directors, giving due consideration to the best interests of the Company and our stockholders, is required to evaluate the relevant facts and circumstances, including whether the underlying cause of the director’s failure to receive the required majority vote can be cured, and make a decision on whether to accept the offered resignation. Any director who offers a resignation pursuant to this provision cannot participate in the board’s decision process. The Board of Directors will promptly disclose publicly its decision and, if applicable, the reasons for rejecting the offered resignation. If the board accepts a director’s resignation pursuant to this process, the Governance Committee will recommend to the Board of Directors whether to fill the resulting vacancy or reduce the size of the board.

COMMITTEES OF THE BOARD

Committee Structure and Responsibilities

Our Board of Directors has four committees: the Audit Committee, the Compensation and Human Resource Committee, the Committee on Directors and Governance, and the Executive Committee.

Audit Committee: The Audit Committee is the principal agent of the Board of Directors in overseeing our accounting and financial reporting processes and audits of our financial statements and internal controls, including assisting in the board’s oversight of (i) the integrity of our financial statements, (ii) our compliance with ethical, legal and regulatory requirements, (iii) the qualifications, independence and performance of our independent registered public accounting firm, and (iv) the performance of our internal audit function.

The Audit Committee also:

•

is directly responsible for the appointment, compensation and oversight of our independent registered public accounting firm and pre-approving all audit services, as well as any audit-related, tax and other non-audit services, to be performed by such firm;

•

reviews and discusses with our independent registered public accounting firm its quality control procedures;

•

regularly reviews the annual audit plan of our independent registered public accounting firm, including the scope of audit activities, and monitors the progress and results of the annual audit;

•

meets with the independent registered public accounting firm, the internal auditors and management to review the adequacy of our internal controls and financial, accounting and reporting processes;

•

discusses with management and the independent registered public accounting firm our annual audited financial statements and unaudited quarterly financial statements, and recommends to the board that the audited financial statements be included in the Company’s annual report filing with the SEC;

•

discusses with management and the independent registered public accounting firm (i) all critical accounting policies and practices used, (ii) any significant financial reporting issues and judgments made in connection with the preparation of our financial statements, including analyses of the effects of alternative accounting methods under generally accepted accounting principles that have been discussed with management and the treatment preferred by the independent registered public accounting firm, (iii) the effect of regulatory and accounting initiatives and off-balance sheet structures on our financial statements, and (iv) any other reports required by law to be delivered by the independent registered public accounting firm, including any management letter or schedule of unadjusted differences;

•

discusses management’s plans with respect to our major financial and enterprise risk exposures such as, for example, financial, cybersecurity, data privacy, business continuity, and legal and regulatory risks;

•

receives periodic reports from our internal auditors on findings of fraud, if any, and its significant findings regarding the design and/or operation of internal control over financial reporting as well as management responses to such findings;

•

reviews our periodic SEC filings and our quarterly earnings releases;

•

oversees our ethics and compliance program;

•

prepares the committee report required pursuant to the rules of the SEC for inclusion in our proxy statements;

•

ensures that the Company has established procedures for the confidential submission of employee concerns regarding accounting or auditing matters, as required by The Sarbanes-Oxley Act of 2002; and

•

reviews relationships between the Company and our independent registered public accounting firm or any of its subsidiaries to ascertain the independence of the external auditors.

The Audit Committee has five members, Messrs. Boykin, Fu, Kepler, and Lund and Ms. Cooper, each of whom meets the NYSE listing independence standards, is independent under our recently-updated independence standards and financially literate, as determined by the board under applicable NYSE standards. In addition, the board has determined that because of their accounting and financial management expertise, four out of five of the members of the Audit Committee are “audit committee financial experts,” as defined under SEC regulations. No member of the committee may receive any compensation, consulting, advisory or other fee from us, other than board compensation described below under the caption “Director Compensation,” as determined in accordance with applicable SEC and NYSE rules. Each Audit Committee member is limited to serving on the audit committees of two other public companies, unless the Board of Directors evaluates and determines that these other commitments would not impair the director’s effective service to us.

A more detailed discussion of the committee’s mission, composition, and responsibilities is contained in the Audit Committee Charter. A copy of this charter, which was last amended by the committee on January 26, 2016, can be found on our corporate governance website at http://www.teradata.com/audit-committee-charter. A report of the Audit Committee is set forth below on page 92 of this proxy statement.

Compensation and Human Resource Committee: In general, this committee (i) discharges our board’s responsibilities relating to the compensation of our executives, (ii) provides general oversight of our management compensation philosophy and practices, benefit programs, and strategic workforce initiatives, (iii) oversees succession planning and leadership development activities, and (iv) reviews and approves our overall compensation principles, objectives and programs covering executive officers and key management employees as well as the competitiveness of our total executive officer compensation practices. The Compensation and Human Resource Committee also:

•

evaluates and reviews the performance levels of our executive officers in light of the Company’s goals and objectives and determines base salaries and equity and incentive awards for such officers;

•

establishes the annual goals and objectives of the CEO, after consulting with the independent members of the board;

•

at executive session of the Board of Directors, discusses its evaluation of, and determination of compensation for, the CEO based on the CEO’s performance against annual goals and objectives;

•

reviews and, as needed, recommends to our Board of Directors for approval our executive compensation plans, including incentive compensation plans, and all equity-based compensation plans;

•

oversees our plans for management succession and development and, on an annual basis, assists the Board of Directors in reviewing and monitoring succession planning, particularly with respect to the CEO;

•

reviews and discusses with management the disclosures in our proxy statements with respect to executive compensation policies and procedures and produces the committee’s annual report related to such disclosure for inclusion in our proxy statements;

•

reviews management’s proposals to make significant organizational changes or significant changes to existing executive officer compensation plans;

•

reviews the stock ownership guidelines and compliance of the CEO and other executive officers with such guidelines;

•

exercises administrative and oversight functions assigned to the committee under the Company’s various benefit plans, including the Company’s 401(k) plan;

•

oversees the Teradata Benefits Committee to which it delegated oversight and management responsibilities for U.S.-based employee benefit plans;

•

periodically reviews and monitors the Company’s diversity and inclusion practices; and

•

reviews and makes recommendations to the board with respect to stockholder approval of executive compensation (say-on-pay votes) and the frequency of say-on-pay votes, including review of stockholder feedback as appropriate.

The Compensation and Human Resource Committee has four members, Ms. Bacus and Messrs. Ringler, Schwarz and Stavropoulos, each of whom the Board of Directors has determined meets the NYSE listing independence standards and our recently-updated independence standards. The committee may form subcommittees with authority to act on the committee’s behalf as it deems appropriate and has delegated authority to our Chief Executive Officer, as a member and subcommittee of our board, to award equity to individuals other than executive officers in limited instances. In addition, the CEO conducts annual performance evaluations of executives and, after consulting with the Chief Human Resource Officer, provides this committee with his assessments and recommendations with respect to the amount and form of compensation for such executives.

In July 2015, this committee extended the engagement of Semler Brossy Consulting Group, LLC as its outside compensation consultant to assist the committee in the development of our executive compensation and benefit programs, including the amount and form of such compensation, and in the evaluation of our CEO. The rules for the use of the compensation consultant by the committee and management include the following: (i) only the committee and its Chair can hire or fire the consultant; (ii) on an annual basis, the consultant will provide the committee with a letter of the projected scope of services for the year; (iii) the consultant’s work will be coordinated with our Chief Human Resource Officer and any project undertaken at management’s request will be with the knowledge and consent of the committee Chair; (iv) the consultant will have direct contact with the committee; and (v) the committee will evaluate the performance of the consultant on an annual basis. In 2015, management did not engage the outside compensation consultant to perform any services for the Company. Moreover, the Compensation and Human Resource Committee reviewed the independence of the consultant in light of SEC rules and NYSE listing standards regarding compensation consultants and has concluded that the firm’s work for the committee and for the Governance Committee is independent and does not raise any conflicts of interest. A more detailed discussion of the committee’s mission, composition, and responsibilities is contained in the Compensation and Human Resource Committee Charter, which was last amended on April 29, 2013, and is available on our corporate governance website at http://www.teradata.com/compensation-committee-charter. A report of the committee is set forth below on page 31 of this proxy statement.

Committee on Directors and Governance: This committee is responsible for reviewing the board’s corporate governance practices and procedures, and:

•

establishes procedures for evaluating the performance of the Board of Directors and oversees such evaluation;

•

reviews the composition of our Board of Directors and the qualifications of persons identified as prospective directors, recommends to the board the candidates to be nominated for election as directors, and, in the event of a vacancy on the board, recommends any successors;

•

reviews and makes recommendations to the board concerning non-employee director compensation;

•

sees that proper attention is given, and appropriate responses are made, to stockholder concerns regarding corporate governance matters; and

•

oversees the Company’s Related Person Transactions Policy and Corporate Governance Guidelines.

The Governance Committee has directly engaged Semler Brossy Consulting Group, LLC as its consultant to review our director compensation program in prior years. However, because the committee did not make any changes to such program in 2015, it did not engage a compensation consultant last year.

The Governance Committee is composed entirely of independent directors, Messrs. Gianoni, Ringler and Stavropoulos. The committee approved the nomination of the candidates reflected in Proposal 1. A more detailed discussion of the committee’s mission, composition and responsibilities is contained in its charter, which was last amended on July 23, 2013, and is available on our corporate governance website at http://www.teradata.com/committee-on-directors-and-governance-charter.

Executive Committee: The Executive Committee has four members, Messrs. Koehler, Lund, Ringler, and Stavropoulos. This committee has the authority to exercise all powers of the full Board of Directors, except those prohibited by applicable law, such as amending the bylaws or approving a merger that requires stockholder approval. This committee meets between regular board meetings if urgent action is required.

Board Committee Membership as of December 31, 2015

Name

Executive

Committee

Compensation and

Human Resource

Committee

Audit

Committee

Committee on

Directors and

Governance

James M. Ringler

Lisa R. Bacus

Edward P. Boykin

Nancy E. Cooper

Cary T. Fu

Michael P. Gianoni

David E. Kepler

Michael Koehler

Victor L. Lund

John G. Schwarz

William S. Stavropoulos

Number of meetings in 2015

Chair

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During our fiscal year 2015, no member of the Compensation and Human Resource Committee was a current or former officer or employee of the Company. None of our executive officers served as a member of the compensation committee (or board of directors serving the compensation function) or director of another entity where such entity’s executive officers served on our Compensation and Human Resource Committee or board.

COMMUNICATIONS WITH DIRECTORS

Stockholders and interested parties wishing to communicate directly with our Board of Directors, any individual director, the Chairman of the Board, or our non-management or independent directors as a group are welcome to do so by writing our Corporate Secretary at Teradata Corporation, 10000 Innovation Drive, Dayton, Ohio 45342. The Corporate Secretary will forward any communications as directed. Any matters reported by stockholders or interested parties relating to our accounting, internal accounting controls or auditing matters will be referred to members of the Audit Committee as appropriate. Anonymous and/or confidential communications with the Board of Directors may also be made by writing to this address. For more information on how to contact our board, please see our corporate governance website at http://www.teradata.com/contact-the-board.

RELATED PERSON TRANSACTIONS

Our Related Person Transactions Policy was adopted by the Board of Directors in 2007, and the board approved minor amendments to the policy in January 2013. Under this policy, the board’s Committee on Directors and Governance (the “Governance Committee”) is responsible for reviewing and approving each transaction in which Teradata was a participant involving or potentially involving an amount in excess of $120,000 and in which a related person had a material interest. A related person is any director or executive officer, any immediate family member of a director or executive officer, a 5% or more stockholder, and any immediate family member of a 5% or more stockholder.

This policy provides for approval or ratification of each related person transaction in accordance with the procedures and policies discussed below (i) by our Governance Committee, or (ii) if the Governance Committee determines that the approval or ratification of such related person transaction should be considered by all of the disinterested members of the Board of Directors, by a majority vote of the disinterested members of the board.

The policy provides for our General Counsel to advise the Chair of the Governance Committee of any potential related person transaction involving in excess of $120,000 of which the General Counsel becomes aware, including management’s assessment of whether the related person’s interest in the potential related person transaction is material. The Governance Committee is required to consider such potential related person transaction, including whether the related person’s interest in the potential related person transaction is material, unless the Governance Committee determines that the approval or ratification of such potential transaction should be considered by all of the disinterested members of the Board of Directors, in which case such disinterested members of the board will consider the potential transaction. Except as set forth below, we will not enter into a related person transaction that is not approved in advance unless the consummation of such transaction is expressly subject to ratification.

If we enter into a transaction that we subsequently determine is a related person transaction or a transaction that was not a related person transaction at the time it was entered into but thereafter becomes a related person transaction, then in either such case the related person transaction must be presented to the Governance Committee or the disinterested members of the Board of Directors, as applicable, for ratification. If the related person transaction is not ratified, then we are required to take all reasonable actions to attempt to terminate our participation in the transaction.

Factors that are reviewed by the Governance Committee or the Board of Directors, as applicable, include: the size of the transaction and the amount payable to a related person; the nature of the interest of the related person in the transaction; whether the transaction may involve a conflict of interest; whether the transaction is fair to the Company; whether the transaction might impair independence of an outside director of the Company; and whether the transaction involves the provision of goods or services to us that are available from unaffiliated third parties and, if so, whether the transaction is on terms and made under circumstances that are at least as favorable to us as would be available in comparable transactions with or involving unaffiliated third parties.

STOCK OWNERSHIP

Ownership by Officers and Directors

This table shows our common stock beneficially owned as of February 1, 2016, by each named executive officer included in the Summary Compensation Table found on page 56 of this proxy statement, each non-employee director, and the directors and executive officers as a group.


Name	Total Shares Beneficially Owned⁽¹⁾		Shares Covered by Options⁽²⁾		% of Class Beneficially Owned⁽³⁾
Non-Employee Directors
Lisa R. Bacus, Class II Director		8,082		0		*
Edward P. Boykin, Class III Director		115,155		38,388		*
Nancy E. Cooper, Class I Director		41,442		18,642		*
Cary T. Fu, Class III Director		52,666		29,312		*
Michael P. Gianoni, Class III Director		6,554		0		*
David E. Kepler, Class I Director		57,627		13,206		*
Victor L. Lund, Class III Director		47,825		0		*
James M. Ringler, Chairman of the Board and Class II Director⁽⁴⁾		140,342		42,161		*
John G. Schwarz, Class II Director		32,950		9,423		*
William S. Stavropoulos, Class I Director⁽⁵⁾		90,403		23,954		*

Named Executive Officers
Michael Koehler, President, Chief Executive Officer and Class II Director⁽⁶⁾		1,749,051		1,478,800		1.34	%
Stephen Scheppmann, Executive Vice President and Chief Financial Officer⁽⁷⁾		270,542		213,787		*
Robert Fair, Chief Operating Officer⁽⁸⁾		369,071		307,155
Daniel Harrington, Executive Vice President, International Region and Global Services⁽⁹⁾		158,302		103,940		*
Laura Nyquist, General Counsel and Secretary		198,192		157,125		*
Saundra Davis, Chief Human Resource Officer		101,009		65,947		*
Hermann Wimmer, Former Co-President		292,237		228,858		*

Directors and Executive Officers as a Group (19 persons)		3,764,763		2,768,219		2.64	%

*	Less than one percent.

(1)

Unless otherwise indicated, total voting power and total investment power are exercised by each individual and/or a member of his or her household. This column includes: (i) shares covered by options that are exercisable within sixty days of February 1, 2016 (as listed in the “Shares Covered by Options” column); (ii) shares granted to directors, the receipt of which have been deferred, as follows: Mr. Boykin, 36,570 shares; Mr. Lund, 11,628 shares; Mr. Ringler, 13,059 shares; and Mr. Stavropoulos, 16,787 shares; and (iii) vested restricted share units, the receipt of which have been deferred, as follows: each of Messrs. Boykin and Lund, 32,197 units; Mr. Fu, 9,063 units; Mr. Kepler, 2,962; Mr. Ringler, 8,081 units; and Mr. Schwarz, 21,806 units.

(2)	Includes shares that the executive officer or director or his or her respective family members have the right to acquire through the exercise of stock options within sixty days after February 1, 2016. These shares are also included in the “Total Shares Beneficially Owned” column.

(3)	The total number of shares of our common stock issued and outstanding as of February 1, 2016 was 129,418,253.

(4)	Includes 69,065 shares held indirectly through a limited liability company.

(5)	Includes 2,000 shares held by Mr. Stavropoulos’ spouse, and 1,000 shares held indirectly by her through a family limited partnership.

(6)	Includes 11,154 shares attributable to units held by Mr. Koehler in a unitized stock fund under the Teradata 401(k) Savings Plan, 14,000 shares held jointly by Mr. Koehler and his spouse and 80,000 shares held indirectly through Koehler family trusts.

(7)	Includes 4,847 shares attributable to units held by Mr. Scheppmann in a unitized stock fund under the Teradata 401(k) Savings Plan.

(8)	Includes 50 shares held indirectly by Mr. Fair through custodial accounts for his children.

(9)	Includes 37,267 shares attributable to units held by Mr. Harrington in a unitized stock fund under the Teradata 401(k) Savings Plan.

Other Beneficial Owners of Teradata Common Stock

To the best of our knowledge, based on filings with the SEC made by beneficial owners of our stock, the following stockholders beneficially own more than 5% of our outstanding common stock.


Name and Address of Beneficial Owner	Total Number of Shares		Percent of Class⁽¹⁾
First Eagle Investment Management, LLC⁽²⁾ 1345 Avenue of the Americas, New York, New York 10105		17,149,513		13.25	%
The Vanguard Group⁽³⁾ 100 Vanguard Blvd., Malvern, Pennsylvania 19355		11,402,316		8.81	%
BlackRock, Inc.⁽⁴⁾ 55 East 52^nd Street, New York, New York 10055		8,531,184		6.59	%

(1)	Percent of class is based on 129,418,253 shares of Teradata common stock issued and outstanding as of February 1, 2016.

(2)

Information is based on Amendment No. 3 to Schedule 13G filed by First Eagle Investment Management, LLC with the SEC on February 5, 2016, which reported sole voting power over 16,619,884 and sole dispositive power over 17,149,513 shares. According to this filing, the First Eagle Global Fund, a registered investment company for which First Eagle Investment Management, LLC acts as investment adviser, may be deemed to beneficially own 12,051,787 of these shares.

(3)

Information is based on Amendment No. 5 to Schedule 13G filed by The Vanguard Group with the SEC on February 10, 2016. According to this filing, The Vanguard Group has sole dispositive power over 11,136,918 shares, shared dispositive power over 265,398 shares and sole power to vote 252,233 shares. According to this filing, (i) Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc. and a registered investment adviser, is the beneficial owner of 206,898 shares as a result of its serving as investment manager of collective trust accounts, and (ii) Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of The Vanguard Group, Inc. and a registered investment adviser, is the beneficial owner of 103,835 shares as a result of its serving as investment manager of Australian investment offerings.

(4)

Information is based on Amendment No. 7 to Schedule 13G filed by BlackRock, Inc. with the SEC on February 10, 2016, which reported sole voting power over 7,176,225 and sole dispositive power over 8,531,184 shares. According to this filing, these shares are beneficially owned by the following subsidiaries of Blackrock, Inc.: BlackRock (Channel Islands) Ltd, BlackRock (Luxembourg) S.A., BlackRock (Netherlands) B.V., BlackRock Advisors (UK) Limited, BlackRock Advisors, LLC, BlackRock Asset Management Canada Limited, BlackRock Asset Management Ireland Limited, BlackRock Asset Management North Asia Limited, BlackRock Asset Management Schweiz AG, BlackRock Capital Management, BlackRock Financial Management, Inc., BlackRock Fund Advisors, BlackRock Fund Managers Ltd, BlackRock Institutional Trust Company, N.A., BlackRock International Limited, BlackRock Investment Management (Australia) Limited, BlackRock Investment Management (UK) Ltd, BlackRock Investment Management, LLC, BlackRock Japan Co Ltd, and BlackRock Life Limited.

DIRECTOR COMPENSATION

Teradata’s Director Compensation Program is designed to enhance our ability to attract and retain highly qualified directors and to align their interests with the long-term interests of our stockholders. The program consists of both a cash component, designed to compensate independent directors for their service on the board and its committees, and an equity component, designed to align the interests of independent directors and stockholders. Mr. Koehler receives no compensation for his service on the board.

Annual Retainer

Under the Director Compensation Program, for the 2015-2016 board year (the period between the Company’s annual stockholders’ meetings), each non-employee member of Teradata’s board receives an annual retainer of $50,000. The Chairman of the Board of Directors (Mr. Ringler) receives an additional retainer of $100,000, and each director serving on the Audit Committee receives an additional retainer of $5,000. The Chair of the Governance Committee receives an additional retainer of $10,000. The Chair of the Audit Committee receives an additional retainer of $20,000 and the Chair of the Compensation and Human Resource Committee receives an additional retainer of $15,000.

Prior to January 1 of each year, a director may elect to receive all or a portion of his or her annual retainer in Teradata common stock instead of cash. In addition, a director may elect to defer receipt of shares of common stock payable in lieu of cash. Payments for deferred stock may be made only in shares of Teradata common stock.

Annual Equity Grant

The Director Compensation Program provides that on the date of each annual meeting of stockholders each non-employee director will be granted restricted share units (“RSUs”) and/or stock options to purchase a number of shares of Teradata common stock in an amount determined by the Governance Committee and approved by the board. For the 2015-2016 board year, each of the non-employee directors received an annual equity grant consisting of RSUs with a total dollar value of $250,000. The RSUs vest in four equal quarterly installments commencing three months after the grant date, and directors may elect to defer receipt of the shares of common stock payable when the RSUs vest.

Initial Equity Grant

The Director Compensation Program also provides that upon initial election to the board, each non-employee director will receive a grant of RSUs. A director may elect to defer receipt of the shares of common stock that would otherwise be received upon vesting of RSUs. The RSUs vest in four equal quarterly installments commencing three months after the grant date. Payment is made only in Teradata common stock.

Ms. Bacus and Mr. Gianoni were the only directors to receive an initial equity grant during 2015 in connection with their appointments to the board. In this regard, on February 24, 2015, Ms. Bacus and Mr. Gianoni each received an initial equity grant of RSUs with a total dollar value equal to $75,000 on the date of grant.

Mid-Year Equity Grant

The Director Compensation Program also provides the board with the discretion, based on the recommendation of the Governance Committee, to grant mid-year equity grants in the form of stock

options and/or awards of restricted shares or RSUs to directors who are newly elected to the board after the annual meeting of stockholders. If a mid-year equity grant is made in the form of RSUs, a director may elect to defer receipt of the shares of common stock that would otherwise be received upon vesting. Option grants made in connection with a mid-year equity grant will be fully vested and exercisable on the first anniversary of the grant. Restricted share unit grants made in connection with a mid-year equity grant vest in four equal quarterly installments commencing three months after the grant date. Payment is made only in Teradata common stock.

Because they joined the board on January 27, 2015, the board exercised its discretion and awarded Ms. Bacus and Mr. Gianoni mid-year equity grants on February 24, 2015. Ms. Bacus and Mr. Gianoni each received a mid-year equity grant of RSUs with a total dollar value of $62,500.

Benefits

We do not provide any retirement or other benefit programs for our directors. However, directors were permitted to have their spouses or immediate family members accompany them on our aircraft when traveling on approved business trips, which occurred on two occasions in 2015, and Mr. Koehler was permitted to use the corporate aircraft for personal use. As of 2016, this benefit will no longer be available.

2015 Director Compensation Table

The following table provides information on compensation paid to our non-employee directors in 2015.


Name	Fees Earned or Paid in Cash⁽¹⁾ ($)		Stock Awards⁽²⁾ ($)		Option Awards⁽³⁾ ($)		Total ($)
James M. Ringler, Chairman		—		400,474		—		400,474
Lisa R. Bacus		—		300,493		—		300,493
Edward P. Boykin		—		305,474		—		305,474
Nancy E. Cooper		55,000		250,418		—		305,418
Cary T. Fu		55,000		250,418		—		305,418
Michael P. Gianoni		50,000		250,418		—		300,418
David E. Kepler		55,000		250,418		—		305,418
Victor L. Lund		75,000		250,418		—		325,418
John G. Schwarz		65,000		250,418		—		315,418
William S. Stavropoulos		—		310,455		—		310,455

(1)

Represents the annual cash retainers earned for 2015. Mr. Boykin elected to receive his cash retainer in deferred shares payable as described in footnote 2 below. Ms. Bacus and Messrs. Ringler and Stavropoulos elected to receive their cash retainers in current shares. These deferred and current shares are reported in the “Stock Awards” column.

(2)

This column shows the aggregate grant date fair value, as determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation, of RSU awards, deferred shares (also referred to as “phantom shares”) paid in lieu of cash annual retainers, and current shares paid in lieu of the cash annual retainers, in each case in 2015. See Note 5 of the Notes to Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (our “2015 Annual Report”) for an explanation of the assumptions we made in

the valuation of these awards. The grant date fair value of the annual award for the 2015-2016 board year is $250,418.

The number of RSUs outstanding as of December 31, 2015, for each of the non-employee directors is Mr. Ringler, 40,244; Ms. Bacus, 3,602; Mr. Boykin, 70,183; Ms. Cooper, 5,794; Mr. Fu, 20,465; Mr. Gianoni, 3,602; Mr. Kepler, 11,171; Mr. Lund, 45,241; Mr. Schwarz, 23,222; and Mr. Stavropoulos, 19,619.

(3)

There were no options granted to the non-employee directors for the 2015-2016 board year. The number of shares underlying each option award outstanding as of December 31, 2015 for each of the non-employee directors is as follows: Mr. Ringler, 42,161; Ms. Bacus, 0; Mr. Boykin, 38,388; Ms. Cooper, 18,642; Mr. Fu, 29,312; Mr. Gianoni, 0; Mr. Kepler, 13,206; Mr. Lund, 0; Mr. Schwarz, 9,423; and Mr. Stavropoulos, 23,954.

Director Stock Ownership Guidelines

Under the board’s Corporate Governance Guidelines, each director should hold stock valued at no less than ten times the amount of the annual retainer paid to such director within five years after he or she is first elected to the Teradata Board of Directors. Stock or stock units beneficially owned by the director, for which beneficial ownership is not disclaimed, including stock or stock units held in a deferral account, should be taken into account. However, for this purpose, the board does not believe it appropriate to include stock options granted to directors by the Company. All of our directors are in compliance with these ownership guidelines.

NO INCORPORATION BY REFERENCE

In our filings with the SEC, information is sometimes “incorporated by reference.” This means that we are referring you to information that has previously been filed with the SEC and the information should be considered as part of the particular filing. As provided under SEC regulations, the following “Board Compensation and Human Resource Committee Report on Executive Compensation” and the “Board Audit Committee Report” contained in this proxy statement specifically are not incorporated by reference into any other filings with the SEC and shall not be deemed to be “Soliciting Material” under SEC rules. In addition, this proxy statement includes several website addresses. These website addresses are intended to provide inactive, textual references only. The information on these websites is not part of this proxy statement.

BOARD COMPENSATION AND HUMAN RESOURCE COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation and Human Resource Committee of the Board of Directors (the “Committee”) manages the Company’s compensation programs on behalf of the Board of Directors. The Committee reviewed and discussed with the Company’s management the Compensation Discussion and Analysis included in this proxy statement. In reliance on the review and discussions referred to above, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015.

Dated: February 22, 2016

The Compensation and Human Resource Committee:

John G. Schwarz, Chair

Lisa R. Bacus, Member

James M. Ringler, Member

William S. Stavropoulos, Member

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (this “CD&A”) describes our executive compensation program for 2015 and the business goals and strategic objectives that drive the design of our program. Our Compensation and Human Resource Committee (the “Committee”) is responsible for reviewing this program and approving the compensation arrangements for our executive officers, including our named executive officers. For 2015, our named executive officers were.


Name		Title
Michael Koehler		President and Chief Executive Officer
Stephen Scheppmann		EVP and Chief Financial Officer
Robert Fair		Chief Operating Officer
Dan Harrington		EVP, International Region and Global Services
Laura Nyquist		General Counsel and Secretary
Saundra Davis		Chief Human Resource Officer
Hermann Wimmer		Former Co-President

Section 1: Business Overview and Program Highlights

2015 Company Overview

Teradata is going through a time of tremendous change and our Board of Directors and management team are working diligently to transform the Company to improve short-term performance and position Teradata for long-term success:

•

Following disappointing 2014 financial results, we started 2015 by announcing the formation of two distinct operating divisions — Teradata Data and Analytics (“TDA”) and Teradata Marketing Applications (“TMA”) — to be run as fully integrated global businesses focused on growing market reach and investing to address broader market opportunities.

•

Despite these actions, during the course of the year, we continued to face broader market challenges in each of these businesses. Specifically with respect to our core TDA business, although the Company competes in a large and attractive data analytics market where we are viewed a global leader, Teradata and many industry peers are facing revenue and earnings-per-share headwinds as the market shifts toward customer buying decisions by business users of the technologies and growth of non-traditional technologies, including cloud and lower-cost alternative architectures. Likewise, the TMA business is challenged by an intensely competitive market environment requiring significant technology and operational investments to achieve profitable growth.

•

These market challenges were discussed with investors throughout 2015, particularly as quarterly results were announced, and many actions were taken to enhance shareholder value and address these trends. For example, during 2015, we returned approximately $647 million to our stockholders as we purchased approximately 19 million shares of Teradata stock.

•

In the fourth quarter of 2015, our board also decided to take a number of bold actions intended to benefit the Company in the short and long term, including developing a comprehensive business transformation plan, exiting the TMA business, and implementing a significant cost reduction plan expected to reduce operating costs by $180 million (inclusive of exiting the TMA business).

•

For the full-year 2015, Teradata had a net loss of $(214) million and total revenues of approximately $2.5 billion, of which approximately 92% was derived from TDA and 8% from TMA. This loss included $478 million of goodwill and acquired intangible asset impairment charges that were made in the fourth quarter in connection with the planned exit of the TMA business.

•

The business transformation plan announced by the Board of Directors is designed to build on our strengths in high-performance data analytics and consulting services by focusing on four key revenue generating areas:

Core on-premises data warehouse solutions: we plan to make it easier to buy, expand, and seamlessly upgrade data warehouses through subscription pricing options, software-only offerings, and innovation;

Cloud offerings: our goal is to expand our data warehouse market opportunity to a broader potential customer market with managed and public cloud solutions;

Analytical ecosystem: working as a trusted advisor for our customers, we will architect, connect, and manage customers’ complex analytical ecosystem with software and services; and

Analytic solutions: we plan to focus on replicable analytic solutions that include packaged business use cases, repeatable service offers, and build on our intellectual property investments.

•

Another central and critical element of our transformation plan is to align our go-to-market approach with these revenue generating focus areas so that we can create a more diversified, stable and predictable revenue stream.

•

The Company has already benefited from some of these actions that were started during 2015. For example, during the year, we increased our research and development expense by double-digits versus the prior year by investing in emerging technologies such as our cloud offerings, which will begin to be rolled out in the first quarter of 2016. Simultaneously, we rationalized our selling, general and administrative expense for the year so that our overall operating expenses, including increased research and development expense, saw only a minimal increase for the year. We also saw growth in key strategic areas such as big data solutions and consulting services on a constant currency basis.

Key Highlights of Executive Compensation Program

In conjunction with these important strategic changes and the development of our long-term business transformation plan, our management team’s roles and responsibilities shifted, and our executive compensation program evolved to balance the Company’s business goals with shareholder interests while maintaining a strong pay-for-performance alignment:

•

When we established the separate TMA and TDA operating divisions at the beginning of the year, Bob Fair (who had previously served as Chief Marketing and Information Officer) and Hermann Wimmer (who was previously the President of Teradata’s International Region) were each appointed as Co-Presidents of the Company with responsibility for leading the TMA and TDA businesses, respectively. Mr. Fair also continued to be responsible for Teradata’s corporate strategy and marketing as well as information technology.

•

In mid-year, Dan Harrington added the International Region to his TDA responsibilities which also includes Global Services. Also, for the first time since our spinoff in 2007, two executive officers resigned to work for other publicly-traded technology companies: the head of Teradata Labs and the President of the Americas Region for TDA. These departures highlighted the need to enhance retention incentives for our management team to ensure continuity of management during our business transformation.

•

In connection with the promotions for Mr. Fair, Mr. Wimmer and Mr. Harrington, the Committee increased their base salaries and annual and long-term equity incentive opportunities to align them with the median competitive market levels for their expanded roles based on our peer group (excluding the four largest peer companies). These changes were also intended to maintain stability and effective leadership during a time of transition. It was critical to preserve continuity in the existing management team, as any unplanned departures of senior management could jeopardize the successful execution of our strategy. These compensation changes are described in more detail under the heading “2015 Compensation Decisions”.

•

In connection with last year’s annual stockholders’ meeting, we reached out to our largest stockholders to solicit their views on our executive compensation program. Upon consideration of investor feedback, the Committee made a number of important changes to the design of the program this year to enhance its performance-oriented structure. Our stockholder engagement efforts, along with the related changes to our compensation program are described in more detail below under the heading “Stockholder Engagement”. Following are a few highlights of the design changes to our executive compensation program:

Design changes to executive compensation program

We increased the percentage of the long-term incentive opportunity allocated to performance-based equity awards from 33.3% to 50%.

We decreased the percentage of the long-term incentive opportunity allocated to stock options from 33.3% to 20%.

We included a 3-year performance period for one-half of the performance-based equity awards.

We added relative total shareholder return as a key performance metric for the 3-year performance-based equity awards.

We eliminated the use of strategic, non-financial performance measures from the long-term equity awards.

We refined our compensation peer group and eliminated a large peer from that group.

•

In light of the decision to exit the TMA business and transition to a single business model focused on our core data warehouse business, on December 1, 2015, the board dissolved the Co-President structure and eliminated the positions held by Mr. Fair and Mr. Wimmer. Mr. Fair was appointed the Company’s Chief Operating Officer with responsibility for completing the successful sale of the TMA business and overseeing our cost reduction efforts, in addition to the other corporate responsibilities mentioned above. At that time, Mr. Fair’s long-term equity award value was increased to reflect the median market level of his new position and to include a one-time retention component to provide stability and an enhanced focus on execution of business goals during the Company’s business transformation. Because there were no comparable officer positions available for Mr. Wimmer under the new single business model, he ceased to serve as an executive officer of the Company at that time. These compensation changes are described in more detail under the heading “2015 Compensation Decisions”.

•

As described in more detail under the heading “Pay-For-Performance Commitment”, we maintain a compensation program that is closely aligned with Company performance. Consistent with this pay-for-performance alignment, the Company’s 2015 annual and long-term incentives for our named executive officers paid out far below target levels — at 32% and 10%, respectively. As a result, the average actual realizable pay (as defined below) for our named executives in 2015 was only a little more than one half (56%) of their total target opportunity.

We remain committed to an executive compensation program that aligns executive pay with Teradata’s performance and reflects the interests of our stockholders. The Committee will continue to review and refine our executive compensation program to ensure that it meets the changing needs of the Company during our business transformation, while continuing to reflect our commitment to pay for performance.

Stockholder Engagement

Stockholder engagement is an important part of our business practices, and we greatly value the input we receive from our stockholders. We are in frequent communication with stockholders on a variety of matters, including operations, corporate governance practices and executive compensation.

At our 2015 Annual Meeting of Stockholders, the advisory vote on our executive compensation program (the “say-on-pay” vote) received the support of 61.8% of shares represented by person or proxy. The 2015 say-on-pay vote represented a significant decrease in the level of stockholder support for our executive compensation program from prior levels. In each of the four preceding years, our say-on-pay proposal had received the support of over 90% of shares represented by person or proxy.

Therefore, in 2015 — both as a part of the proxy solicitation process and following our 2015 annual meeting — we solicited input from our largest 25 institutional investors, representing approximately 69% of our outstanding shares, regarding our executive compensation program. Our outreach team included Teradata Investor Relations, members of Teradata management and, when requested, the independent Chair of the Committee. We conducted conference calls with those investors who responded to our outreach efforts (and others who reached out to us) to understand their views regarding our executive compensation program (and other topics of interest to those investors) and respond to questions.

Although there were no specific comments regarding the pay levels for our named executive officers, we did receive several comments regarding the structure of our annual and long-term incentive program design, as well as a comment regarding the structure of our peer group. Teradata management presented the results of our stockholder engagement efforts regarding executive compensation to the Committee. The Committee then evaluated the feedback received from our investors, as well as proxy advisory firms and, with the assistance of the Committee’s independent compensation consultant, reviewed the compensation practices of our peer group. After considering the results of our 2015 say-on-pay vote and taking all these factors together, the Committee weighed the various possible actions to determine the best response to the common themes that arose from our stockholder engagement efforts.

The following table provides a summary of common themes expressed by our top investors regarding our executive compensation program and the Committee’s response to stockholder concerns.



Stockholder Feedback		Committee Response
Weighting of Performance-Based Equity	Prefer that a larger portion of long-term incentive value be allocated to performance-based equity awards	Effective for our 2015-16 long-term incentive award program, the Committee increased the percentage of long-term incentives allocated to performance-based restricted share units from 33.3% to 50%, while reducing the allocation to stock options (from 33.3% to 20%) and service-based restricted share units (from 33.3% to 30%).
Performance Periods	Prefer that performance-based equity incentive awards have a performance period longer than one year	The Committee increased the performance period applicable to 50% of our performance-based restricted share units from one year to three years.
Performance Measures	Prefer that mix of long-term incentive awards include a relative performance measure	One-half of the performance-based restricted share units granted as part of our 2015-16 long-term incentive program will be earned based on Teradata’s total shareholder return (“TSR”) over a 3-year performance period relative to the other companies in the S&P 1500 Technology Index.
Annual Incentive Program	Prefer greater transparency in disclosure of the strategic objectives and measures used in incentive compensation arrangements	In this proxy statement, we have enhanced our disclosures regarding the pre-established strategic objectives for the annual incentive program and the pre-established strategic measures for the 2014-15 performance-based restricted share units. The Committee also eliminated the use of strategic non-financial measures from the performance-based restricted share units granted as part of our 2015-16 long-term incentive program.
Peer Group	Prefer that EMC Corporation not be included in Teradata’s executive compensation peer group, because of its relatively large size (by revenue)	In addition to other minor peer group changes, the Committee removed EMC Corporation from Teradata’s executive compensation peer group.

We will continue to engage with our stockholders on variety of matters, including executive compensation. The Committee will continue to take into account feedback received from our stockholders in evaluating and structuring our executive compensation program.

Pay-For-Performance Commitment

The Committee has designed the compensation program for our named executive officers to be closely aligned with Company performance. Our core compensation program consists of base salary, annual incentives and long-term incentives (performance-based restricted share units, service-based restricted share units and stock options). As illustrated below, in 2015, approximately 67% of the target total direct compensation for our CEO, and 62% for the other named executive officers, was performance-based.

LOGO

As demonstrated below, executive pay is strongly aligned to performance. For the last three fiscal years, Teradata has not met the financial performance objectives of its compensation plans, and as a result:

1. Little to No Performance-Based Restricted Share Units Were Earned for the Last Three Years. Because we did not achieve our threshold financial goals (based on GAAP revenue and non-GAAP earnings per share) for 2013, 2014 or 2015, none of the annual performance-based restricted share unit awards for those years were earned by our named executive officers based on financial results. Our 2015-16 performance-based restricted share unit awards also included non-financial, strategic measures, and our named executive officers earned a small portion (10% of target) of those awards based on the partial achievement of those strategic measures.

2. No Payout is Expected for the Special 2016 Performance-Based Restricted Share Units. In 2012, the Committee approved a one-time special 2016 performance-based restricted share unit award, which was allocated: (i) 70% to the achievement of certain challenging or “stretch” GAAP revenue and non-GAAP earnings per share targets in 2016, and (ii) 30% to a subjective assessment of performance for the period through 2016. As reported, we do not expect any of the special 2016 performance-based restricted share units to become payable, because achievement of the threshold performance goals for these long-term awards is not reasonably probable at this time. Thus, no compensation expense was recorded for these awards in 2014 or 2015.

3. Stock Options Granted in the Last Five Years Have Not Generated Any Value to Recipients. As of December 31, 2015, the stock options granted to our named executive officers during the last five years (2011 through 2015) were underwater, meaning that the exercise price per share exceeded the closing price of our common stock on that date.

4. Annual Incentives Have Paid Out Less than 40% of Target for the Last Three Years. For the last three completed fiscal years, the annual incentives earned by our named executive officers have been substantially below the target opportunity level. For 2015, 2014 and 2013, annual incentives were only earned at 32%, 31.5% and 37.5% of the 100% target incentive opportunity, respectively.

5. No Pay Increases for Chief Executive Officer for the Last Three Years. Our CEO has received the same base salary and annual bonus incentive opportunity since 2013.

The chart below compares the target total direct compensation (base salary, annual incentive and long-term incentives, at target levels) of our CEO over the last five completed fiscal years with his actual realizable pay for the same period. Our CEO’s target total direct compensation was established at approximately the median of our executive compensation peer group. However, as shown below, his actual realizable pay was substantially below the target levels.

LOGO

For purposes of the above chart, actual realizable pay is defined as the sum of (1) base salary and annual incentive earned during the period, (2) the value of service-based restricted share units granted during the period, (3) the value of performance-based restricted share units earned during the period based on actual performance, and (4) the intrinsic value (i.e., the excess of our year-end stock price over the exercise price) of stock options granted during the period. Realizable pay equity award values are based on our closing stock price on December 31, 2015, except that no amount is shown for the special 2016 (4-year) performance-based restricted share units, because it is not reasonably probable that the threshold performance objectives for those awards will be achieved.

2015 Compensation Decisions

The 2015 total direct compensation levels for our named executive officers were determined by the Committee as follows:



Element		2015 Decisions – Total Direct Compensation Levels
Base Salary		• The Committee did not increase the base salary of our CEO. • In early 2015, the Company underwent an organizational restructuring and appointed Mr. Fair and Mr. Wimmer as Co-Presidents with responsibility for each of Teradata’s newly-formed TMA and TDA operating divisions. In connection with this restructuring, Mr. Fair and Mr. Wimmer each assumed significantly expanded responsibilities and received an increase in base salary to $550,000 based on competitive market data for their new roles. • As the Company has undergone a transition during 2015, Mr. Harrington has assumed new responsibilities, including acting as head of the International Region for the TDA division. In light of his expanded role, Mr. Harrington received a 10% increase in base salary in line with market median level for his new role. • In connection with an annual competitive market review, the Committee also authorized modest base salary increases of approximately 2% for Mr. Scheppmann and Ms. Nyquist (consistent with our general employee merit pool guidelines), and a base salary increase of 5% for Ms. Davis (consistent with our general merit pool guidelines and to bring her salary closer to market median level).

Annual Bonus		• The Committee did not increase the target annual incentive opportunity of our CEO. • In light of the expansion of their responsibilities resulting from the restructuring described above, Mr. Fair and Mr. Wimmer each received an increase in his 2015 target annual incentive opportunity to 110% (from 100%). • The Committee did not increase target annual incentive opportunities for the remaining named executive officers in connection with an annual competitive market review.

Long-Term Incentives		• The Committee did not increase the grant level value of our CEO for the 2015-2016 long-term incentive award. • In connection with an annual competitive market review, the Committee increased the targeted grant value of long-term incentive awards to our other named executives to amounts representing roughly the median of market levels (excluding the four largest peer companies).
		• Mr. Scheppmann’s long-term award value was increased to $1,800,000 (from $1,400,000), Mr. Harrington’s long-term award value was increased to $2,100,000 (from $1,800,000), Ms. Nyquist’s long-term award value was increased to $800,000 (from $750,000), and Ms. Davis’s long-term award value was increased to $650,000 (from $550,000). • Mr. Fair’s long-term award value for 2015-16 was increased to $3,000,000 (from $1,800,000), which included a market-based increase of $750,000 and a one-time retention grant of service-based restricted share units with a value of $450,000 to stress the value and importance of his continued service to the future success of the Company and to provide senior management stability during a time of transition.
		• Early in the year, in connection with the expansion of their responsibilities as Co- Presidents, the Committee approved a one-time grant of service-based restricted share units to Mr. Fair and Mr. Wimmer, each with a value of $750,000. These awards vest in equal installments over a 3-year period. In connection with this management restructuring, the Committee approved a one-time retention grant of service-based restricted share units to Mr. Harrington with a value of $1,000,000. This award cliff vests on the third anniversary of the date of grant and was designed to, among other things, address increased retention concerns due to the need for senior management stability during the Company’s transition period. For more information about the business reasons for these one-time retention grants, please refer to the heading “Off- Cycle Grants” in Section 3 of this Compensation Discussion and Analysis.

Section 2: Compensation Philosophy, Policies and Practices

Our executive compensation program is designed to achieve the Company’s goal of attracting, retaining and developing global business leaders with proven capabilities to drive financial and strategic growth, while also delivering long-term stockholder value. We focus on providing compensation opportunities that are aligned with our stockholders’ interests, promote sound governance practices, and deliver pay-for-performance. The Committee has also implemented policies and practices to reduce compensation risks and align compensation with industry norms.

What We Do

ü Establish Competitive Compensation Levels. We target the total direct compensation for our named executive officers at levels that are competitive in the high–technology industry — within a range of 10% above or below the median target level for our peer group. We also strive to maintain internal pay equity among our executives in order to retain, motivate and, as necessary, attract executive talent.

ü Maintain a “Double Trigger”. Our “change in control” arrangements provide benefits on a “double trigger,” meaning that the severance benefits are paid, and equity awards vest, if our executives incur a qualifying termination in connection with a change in control.

ü Minimize Compensation Risks. We periodically review our compensation program to confirm that our compensation policies and practices are not encouraging excessive or inappropriate risk taking by our employees. Potential incentive payouts are capped and we retain discretion to adjust payouts based on the quality of Company and individual performance and adherence to our ethics and compliance programs.

ü Impose Robust Stock Ownership Guidelines. Our stock ownership guidelines require our executives to achieve robust ownership requirements, ranging from 115,000 to 15,000 shares (excluding options and unvested performance share units) for our CEO and other named executive officers, respectively. In connection with the organizational restructuring described above, our stock ownership guidelines were modified to set the minimum ownership requirement for the Chief Operating Officer at 70,000 shares. These guidelines encourage our executives to maintain a meaningful equity interest in the Company and a shared commitment to value creation, while satisfying their needs for portfolio diversification. Each named executive officer has exceeded his or her required ownership level.

ü Equity Holding Requirements. Our executives are required to hold 100% of the shares, net of taxes, received upon the exercise of stock options or payout of restricted share units until the minimum stock ownership guidelines are satisfied.

ü Maintain a “Clawback” and “Harmful Activity” Policy. We maintain a Compensation Recovery Policy (commonly referred to as a clawback policy), which generally provides that the Company may recover cash and equity-based compensation if payout or vesting was based on financial results that were subsequently restated. The policy supports the accuracy of our financial statements and helps to align the interests of our executive officers with those of our stockholders. We also retain the right to cancel outstanding equity awards and recover realized gains if executives engage in certain “harmful activity,” such as violating a non-competition or non-solicitation covenant.

What We Do

ü Retain an Independent Compensation Consultant. The Committee retains an independent consultant to assist in developing and reviewing our executive compensation strategy and to confirm that the design and pay levels of our compensation programs are consistent with market practices.

ü Consider the Impact of Tax and Accounting Rules. The Committee takes into account the effect of tax and accounting rules in structuring our executive compensation program. For example, annual incentive awards paid under our Management Incentive Plan and stock options and performance-based restricted share units granted in 2015 generally were intended to qualify as performance-based compensation for purposes of Section 162(m) of the Internal Revenue Code and thus generally were intended to be fully deductible for federal income tax purposes. However, the Committee has not adopted a policy that requires all compensation to be deductible because we want to preserve the ability to provide cash or equity compensation to an executive that is not deductible under Section 162(m) if we believe that it is in our stockholders’ best interests.

ü Review Share Utilization. We regularly review overhang levels (the dilutive impact of equity awards on our stockholders) and burn rates (the aggregate shares awarded as a percentage of total outstanding shares), and our average burn rate for the last three completed fiscal years is below industry norms.

What We Don’t Do

× No Excise Tax Gross-Ups. Our management is not entitled to receive any “gross up” payments related to excise taxes that may be imposed in connection with golden parachute arrangements under the Company’s change in control severance plan.

× No Hedging or Pledging of Company Stock. Our insider trading policy restricts our employees, officers and directors from engaging in hedging transactions involving Teradata stock or from pledging Teradata securities.

× No “Timing” of Equity Grants. We maintain a disciplined equity approval policy. We do not grant equity awards in anticipation of the release of material, non-public information. Similarly, we do not time the release of material, non-public information based on equity grant dates. Under our equity grant approval policy, we generally grant annual equity awards at the regular meeting of the Committee that occurs during the period beginning on the later of (i) two days after we announce our third quarter results or (ii) the date we file our third quarter report on Form 10-Q, and ending on December 15.

Section 3: Core Compensation Program

The following is a brief summary of each element of our core compensation program for our named executive officers as of December 31, 2015.

Base Salary

We provide a base salary to retain and, as necessary, attract key executive talent and to align our compensation with market practices. Base salaries are reviewed and established by the Committee on

a competitive basis each year to ensure they are appropriate and consistent with market median levels (excluding the four largest peer companies). In 2015, the Committee made the following adjustments to base salary in light of an annual competitive market review and, in the case of Messrs. Fair, Harrington and Wimmer, in the context of organizational restructuring described in Section 1 above. The salary increases for Mr. Scheppmann and Ms. Nyquist were consistent with the merit pool guidelines applied to the general employee population.


Name	2014 Base Salary		2015 Base Salary		% Increase
Michael Koehler	$	800,000	$	800,000		0.00	%
Stephen Scheppmann	$	470,000	$	479,400		2.00	%
Robert Fair	$	410,000	$	550,000		34.15	%
Dan Harrington	$	410,000	$	460,000		12.20	%
Laura Nyquist	$	336,350	$	343,077		2.11	%
Saundra Davis	$	268,852	$	282,295		5.00	%
Hermann Wimmer⁽¹⁾	$	491,097	$	550,000		11.99	%

(1)	Mr. Wimmer’s base salary was converted to $US at an exchange rate of €1 = 1.321767 in 2014 and €1 = 1.13035 in 2015.

Annual Bonus Awards

All of our named executive officers participate in our annual bonus program. Each named executive officer’s annual incentive opportunity (as a percentage of base salary) remained the same for 2015, with the exception of Mr. Fair and Mr. Wimmer, who each received an increase of 10% in connection with his promotion to the respective Co-President role described in Section 1 above.


Name	Opportunity (as % of base salary)
Michael Koehler		125	%
Stephen Scheppmann		100	%
Robert Fair		110	%
Dan Harrington		100	%
Laura Nyquist		65	%
Saundra Davis		65	%
Hermann Wimmer		110	%

Total payouts under the annual bonus program are determined by the weighted measure of three different components: (i) revenue, based on generally accepted accounting principles (“GAAP”); (ii) operating income, as reported in the Company’s 2015 earnings release (i.e., excluding stock-based compensation expenses and other special items); and (iii) strategic objectives. No single component is given disproportionate weight and each has a specific business objective.

When establishing the performance objectives under our 2015 annual bonus program in February 2015, the Committee identified a number of important strategic initiatives that were a priority to accomplish in 2015. In considering the importance of these initiatives to the long-term success of the Company, the Committee decided to weight the revenue and non-GAAP operating income measures at 30% each (a decrease from 35% each in 2014) and the strategic objectives at 40% (an increase from 30% in 2014).

The Committee believed that this allocation appropriately stressed the importance of achieving certain key strategic objectives and investments initiatives that were critical to building the foundation for our business transformation strategy, but that might not be reflected appropriately in the short-term financial results. For example, as discussed in Section 1 above, certain of our strategic objectives were related to achieving new technology milestones; however, investments in research and development can negatively impact short-term profitability. Other strategic objectives were intended to position the Company for growth in future years, but were expected to pressure our 2015 financial results, including our goal to increase subscription contract commitments.


Measure	Weight	Business Objective
Revenue	30%	Reward our executives for achievement of revenue objectives
Non-GAAP Operating Income	30%	Incent our executives to deliver attractive contribution margins and stockholder value
Strategic Objectives	40%	Motivate our executives to focus on the advancement of strategic objectives to position the Company for future growth (see below)

GAAP Revenue and Non-GAAP Operating Income

The Committee established targets for GAAP revenue and non-GAAP operating income in February 2015. The following chart sets forth the GAAP revenue and non-GAAP operating income targets for 2015 and related achievement levels. The Committee established the 2015 targets below 2014 actual levels to reflect (i) the challenging market environment and trends described above in Section 1, and (ii) the guidance we gave to investors and analysts at the beginning of the year with respect to anticipated results in 2015. We did not achieve our threshold levels for the 2015 financial measures, and therefore our named executive officers did not receive any payout with respect to those goals.


Financial Measure (in millions) (60% of total weighting for payout)	0% (Threshold)⁽¹⁾		100% (Target)		200% (Maximum)		Actual Performance			Achievement Level
GAAP Revenue	$	2,630	$	2,752	$	3,072	$	2,553	⁽²⁾		0	%
Non-GAAP Operating Income	$	510	$	546	$	652	$	409			0	%

(1)	No payout can be earned for either financial measure if the threshold level of operating income is not achieved.

(2)	2015 revenue results have been adjusted to exclude the negative impact of foreign currency exchange rates.

Please see the discussion under the heading “Determination of Performance” on page 51 for a more detailed description of the financial measures and the calculation of actual performance results after a minor pre-approved adjustment.

Strategic Objectives

As described above, 40% of each named executive officer’s 2015 annual bonus opportunity was allocated to the achievement of pre-established strategic objectives to further our long-term strategy and position the Company for future success. The payout level for this portion of the bonus program was based on the Committee’s subjective assessment of overall performance relative to a mix of pre-established strategic performance criteria, as illustrated below:



Objectives	Strategic Performance Criteria	Results
Grow Data Warehouse and Big Data (Analytics) Market Share	• Advancing long-term technology strategy and investments	Successfully achieved key technology milestones including Teradata database and big data appliance releases.

	• Adding new accounts	Exceeded new account objectives for big data customers but fell short with respect to data warehouse new account target.

	• Maintaining our status as a market leader and as a trusted advisor for all data	Continued to be recognized market leader for data warehouse and data management solutions for analytics by Gartner Group and for in-memory database platform offerings by Forrester Research, Inc.

	• Managing sales territories to optimize long-term growth	Optimized hundreds of data analytics sales territories in connection with new go-to-market strategy.
Grow Marketing Application Market Share	• Advancing long-term technology strategy and investments	Successfully improved upgradeability and customization features and expanded features and capabilities in key offerings.

	• Maintaining our status as a market leader for marketing applications	Continued to be recognized as a leader in real-time interaction management by Forrester Research and as market leader in multichannel campaign management and marketing resource management by Gartner Group.

	• Achieving high subscription renewal rate and growth in annual recurring revenues	Missed recurring revenue renewal and growth rate objectives.

	• Adding new accounts	Generally did not meet new marketing application account targets although exceeded objectives with respect to campaign management marketing wins.
Improve Operational Excellence	• Maintaining our excellent product delivery and quality metrics	Generally exceeded targets with respect to system availability, cloud infrastructure and security standards, and other operational goals.

	• Reaching expense and product cost efficiencies	Exceeded cost erosion objectives but fell short of expense goals

	• Maintaining our leadership position as an ethical company	Continued recognition for having a world-class ethics and compliance program.

Payouts of Annual Bonuses

Each named executive officer was entitled to a payout under the annual bonus program equal to 32% of his or her target annual incentive opportunity, which reflected a 0% achievement level for the financial measures and an 80% achievement level for the pre-established strategic criteria, based on the Committee’s subjective assessment of performance relative to those criteria. The amount of the 2015 annual bonus payments is set forth in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table of this proxy statement on page 56.

For more information on the 2015 annual bonus program for our named executive officers, please refer to the “Grants of Plan-Based Awards” section on page 60 of this proxy statement.

Long-Term Incentives (Equity Awards)

The total direct compensation levels for our named executive officers are heavily weighted to long-term incentive opportunities, which vest over a period of three to four years. This structure is intended to enhance our retention incentives and focus our executives on delivering sustainable performance over the longer-term.

Annual Grants (2015-2016)

On December 1, 2015, the Committee established the 2015-2016 long-term incentive opportunities for our named executive officers as part of our annual grant cycle. When establishing these levels, the Committee considered a number of factors, including our goals of setting long-term incentive opportunities at more competitive levels, increasing the retentive nature of the incentive program and appropriately managing our dilution and run rate levels. Moreover, before finalizing long-term incentive award opportunities, the Committee assessed each named executive officer’s general performance during the year, as well as his or her relative roles and responsibilities within the Company, along with internal equity considerations. After reviewing these factors, the Committee allocated a greater percentage of total direct compensation to long-term incentives and established the named executive officers’ target long-term incentive award levels as follows:


	Long-Term Incentive Award Value
Name	*2015*		*2014*
Michael Koehler		$6,000,000		$6,000,000
Stephen Scheppmann		$1,800,000		$1,400,000
Robert Fair⁽¹⁾		$3,000,000		$1,800,000
Dan Harrington		$2,100,000		$1,800,000
Laura Nyquist		$800,000		$750,000
Saundra Davis		$650,000		$550,000
Hermann Wimmer⁽²⁾		$0		$1,800,000

(1)

The increase in Mr. Fair’s long-term incentive award value includes both a market-based increase of $750,000 and a one-time component of $450,000 as described above.

(2)

Mr. Wimmer did not receive a long-term incentive award for 2015-2016 because his position of Co-President was eliminated as of December 1, 2015.

As part of the annual grant cycle, the Committee uses three equity vehicles to deliver the long-term incentive opportunity: (i) performance-based restricted share units, (ii) service-based restricted share units, and (iii) stock options. This mix allows us to balance our goals of managing stock dilution and expense while providing meaningful retention incentives and performance-based compensation.

As described above, the Committee made several changes to our long-term incentive compensation program, in response to feedback from our top investors and proxy advisory firms, along with our assessment of market practices. The following table describes each equity vehicle used in the 2015-16 long-term incentive program, along with its relative weighting and the rationale for its use.



Equity Award and Description and Rationale			Weight
	Performance-Based Restricted Share Units		50%

	•	Three-Year Relative Total Shareholder Return (TSR). In response to investor feedback and in order to strengthen our focus on the creation of long-term stockholder value, the Committee adopted the use of a 3-year performance period for half of the performance-based restricted share units. The 3-year performance-based restricted share units will be earned based on our TSR relative to the other companies in the S&P 1500 Technology Index for the 3-year period ending December 31, 2018. The payout opportunity ranges from 50% of target for TSR at the 25th percentile, 100% of target for TSR at the 50th percentile, and 200% of target for TSR at or above the 90th percentile. • In establishing the threshold and target performance levels, the Committee took into account that, in the last three years, the Company has performed at or below the 25th percentile level of the S&P 1500 Technology Index. As a result, in taking into consideration stockholder interests, the Committee believed that achievement at or above the 50th percentile would represent significant performance improvement, while also representing a realistic, yet challenging, performance goal. In future years, the Committee will re-examine historic performance and the payout structure for such awards. • In further alignment with stockholder interests, the Committee also (i) approved a cap on the absolute level of payout that could be earned under these awards, and (ii) capped any payout at median results if absolute TSR were negative (but relative TSR greater than the 25th percentile). Given that the comparator group includes over 200 companies, the Committee believed that a negative TSR that was above the 25th percentile would only occur during a significant technology-wide economic downturn and, in such event, it would be appropriate to motivate executives to perform as well as possible, even if the TSR were negative.
	•	One-Year Non-GAAP EPS. The Committee retained the use of a 1-year performance period for the other half of the performance-based restricted share units, because the Committee believes that, during this period of ongoing business transformation, it is important to continue to tie a portion of these awards to the achievement of specified financial performance objectives over a 1-year performance period. • Teradata operates in a highly competitive industry that is changing rapidly, and our Company is in the midst of a significant business transformation. We believe that relying exclusively on 3-year performance periods would negatively affect our ability to set goals for our performance-based restricted share unit awards that are appropriately rigorous and aligned with the progress of our ongoing business transformation. Using a 1-year performance period for 25% of the total target long-term incentive opportunity allows the Committee to assess the execution of our business transformation and the impact of ongoing changes and developments in our industry.



Equity Award and Description and Rationale			Weight
		• The 1-year performance-based restricted share units will be earned based on the extent to which a non-GAAP earnings per share financial goal is achieved for fiscal 2016. The non-financial strategic measures used in the prior year grants were removed. The payout opportunity ranges from 25% to 200% of the units subject to the award; although, consistent with our pay-for-performance culture, no payout for financial goals can be earned if performance is below the threshold level for 2016. • The number of performance-based restricted share units earned will be adjusted to factor out the effect of any share repurchases below or in excess of the 2016 plan level and to eliminate the positive or negative impact of any significant foreign currency exchange rate fluctuations. • In order to mitigate the risk of using annual performance goals under our equity program, the units earned, if any, vest one third on the date the Committee certifies performance results, one third on the first anniversary of the certification date, and the remaining third on the second anniversary of the certification date. This vesting schedule helps to focus our executives on generating earnings per share results that translate into sustained, long-term stockholGAAP Revenue and Non-GAAP Operating Income der value.

	Service-Based Restricted Share Units		30%

	•	Retention. The service-based restricted share units provide our named executive officers with the opportunity to receive shares of our common stock if they remain employed by us. The service-based restricted share units are intended to help retain our executives and maintain a focus on future and continued success. The vesting schedule of service-based restricted share units is a 3-year graded schedule which is in alignment with peer practices.

	Stock Options		20%

	•	Alignment with Stockholder Interests. All stock options were granted with an exercise price equal to the fair market value of the shares on the date of grant. Stock options align the interests of executives with those of stockholders because the value of stock options only increases when stock price increases. This rewards sound business decisions that lead to improved long-term performance. In addition, a significant percentage of our institutional shareholders contacted during our engagement efforts favored retaining stock options as a meaningful portion of our long-term incentive program.

	•	Long-Term Horizon. Stock options vest over a 4-year period in order to enhance our retention incentives and encourage focus on longer-term performance.

For more information on the 2015-2016 long-term incentive awards for our named executive officers, please refer to the “Grants of Plan-Based Awards” section on page 60 of this proxy statement.

Payout of 2014-15 Performance-Based Restricted Share Units

In December 2014, as part of our annual grant cycle, we granted performance-based restricted share units to our named executive officers, providing them with the opportunity to be credited with a number of units based on the extent to which a non-GAAP earnings per share goal (70% of award) and certain strategic measures (30% of award) were achieved. The payout opportunity ranged from 25% to 200% of the units subject to the award; although, consistent with our pay-for-performance culture, no payout for financial goals could have been earned if performance was below the threshold level. Based on actual performance results, none of the named executive officers earned a payout for the 70% of his or her target 2015 performance-based restricted share unit award that was allocated to the non-GAAP earnings per share goal, because the threshold level of non-GAAP earnings per share was not achieved.

The following chart sets forth the non-GAAP earnings per share targets for the 2014-15 performance-based restricted share units and related achievement levels. These targets were set in February 2015.

Performance Goal

25%
(Threshold)

50%

100%
(Target)

200%

(Maximum)

Actual
Performance

Achievement
Level

Financial Measure (70% Weighting) Non-GAAP Earnings per Share

2.49

2.54

2.67

3.20

2.01

⁽¹⁾

(1)	2015 earnings per share results have been adjusted to eliminate the effect of stock repurchases above the 2015 plan level approved by the Board of Directors in February 2015.

Please see the discussion under the heading “Determination of Performance” in Section 5 of this CD&A for a more detailed description of the financial measures and the calculation of actual performance results after pre-approved adjustments.

As described above, 30% of the payout opportunity for the 2014-15 performance-based restricted share units was based on the extent to which we accomplish certain pre-established strategic measures that were the foundation for our business transformation. The strategic measures could not result in a payout over 100% of target unless GAAP revenue for 2015 (as adjusted for foreign currency fluctuations) exceeded $2,603,557,813 (2014 GAAP revenue, adjusted using January 2015 rates). The following table summarizes the pre-established strategic measures for the 2014-15 performance-based restricted share units and the Committee’s assessment of performance relative to those measures.



Strategic Measures	Target		Results
Increase # of New Account Sales Wins • Increase analytic infrastructure new account wins, over prior 3-year average • Grow cloud analytic infrastructure customer base • Increase number of marketing applications new customers, year over year		15%		-3 -5 150 -8	% % % %
Grow % of Annual Recurring Sales Revenue		6%		4	%⁽¹⁾
Grow % of Big Data Sales Revenue		80%		51	%

(1)	The growth in annual recurring sales revenue reflects results as adjusted to exclude the negative impact of foreign currency exchange rates.

Based upon the performance results described above, the Committee determined that each named executive officer was entitled to a payout of his or her 2014-15 performance-based restricted share units equal to 10% of the target opportunity, which reflected a 0% achievement level for the financial measure and a 33% achievement level for the pre-established strategic measures. In reaching its decision with respect to the strategic measures, the Committee found that, while the significant majority of the measures were not met, management achieved some degree of success in key areas, such as growing the customer base for our cloud offerings and increasing annual recurring and big data sales revenue, which are important drivers for future growth. As noted above, the strategic measures used in the prior year grants were removed for the 2015-16 performance-based restricted share unit awards.

Off-Cycle Grants

Early in 2015, at the time the Company established the TMA and TDA divisions and appointed Mr. Fair and Mr. Wimmer as Co-Presidents of the Company, the Committee approved a one-time grant of service-based restricted share units each with a value of $750,000. These awards vest in equal installments over a 3-year period. In connection with this management restructuring, in June 2015, the Committee also approved a one-time retention grant of service-based restricted share units to Mr. Harrington with a value of $1,000,000. This award cliff vests on the third anniversary of the date of grant.

The Committee believed that these one-time, service-based awards were appropriate for a number of reasons, including:

•

the increased retention concerns due to the uncertainty inherent in the business transformation and leadership transitions discussed above in Section 1;

•

the need for senior management stability and focus on execution during this time of significant change;

•

that unvested equity awards held by these executives had relatively low value and their prior grants of performance-based restricted share units in 2013 and 2014 did not pay out, which negatively impacted their share ownership levels and made them potentially vulnerable to being recruited away from the Company; and

•

that service-based restricted share units, while not the preferred long-term incentive design, would be the most effective at rewarding these executives for their promotion and achieving the retention objectives listed above.

Section 4: Determination of Performance

Our GAAP revenue, non-GAAP operating income and non-GAAP earnings per share goals used in the 2015 annual bonus program and the 2015 performance-based restricted share unit awards tie to our audited financial statements as adjusted and disclosed to investors in our quarterly earnings releases. These results are highly scrutinized by our finance and accounting departments. These non-GAAP results are determined by excluding certain special items, including, among other things: amortization of acquisition-related intangible assets, acquisition transaction and integration expenses, impairment of goodwill, and stock-based compensation expense.

Consistent with prior year actions, the Committee authorized an adjustment to GAAP revenue for purposes of determining achievement of the financial performance goals for the 2015 annual bonus program to exclude the impact of foreign currency exchange rates from pre-established 2015 operating plan rate levels. In addition, in 2015, for the 2015 performance-based restricted share unit awards, the Committee approved an adjustment to non-GAAP earnings per share results to exclude the impact of share repurchases above planned levels and also adjusted the results with respect to the Annual Recurring Sales Revenue strategic objective to exclude the impact of foreign currency exchange rates from pre-established 2015 operating plan rate levels.

Section 5: Compensation Consultant and Peer Group

Compensation Consultant

The Committee directly retains Semler Brossy Consulting Group, LLC (“Semler Brossy”) to assist in developing and reviewing our executive compensation strategy and program. Semler Brossy reports directly to the Committee and serves at the sole discretion of the Committee. It does not perform any other services for the Company other than as an adviser to the Board of Directors on its director compensation program. The Committee assessed the independence of Semler Brossy pursuant to SEC rules and NYSE listing standards and concluded that no conflict of interest exists that would prevent the consulting firm from independently advising the Committee.

Semler Brossy has provided information to the Committee about the target market compensation levels, pay mix, and overall design for the components of total direct compensation based on the pay practices of companies in our executive compensation peer group, as established by the Committee, and from a compensation survey described below.

Compensation Peer Group

The Committee examines the Company’s peer group on an annual basis. In order to be included in our compensation peer group, a company generally must meet the following criteria: (i) be software or storage focused with a software component; (ii) have revenues of between one-third to three times our size; (iii) be publicly traded in the United States; (iv) sell predominately to businesses (i.e., business-to-business); and (v) conduct business globally.

Based on these factors, as well as input received during our stockholder outreach efforts, in 2015, the Committee reviewed our compensation peer group and made the following modifications: (i) removed EMC Corporation and Brocade Communications, Inc., and (ii) added Unisys and Cadence Design Systems. Additionally, TIBCO Software Inc. and Informatica Corporation were removed as they are no longer public companies. The current compensation peer group is as follows:



Compensation Peer Group
Adobe Systems Incorporated	Cadence Design Systems	salesforce.com, Inc.
Akamai Technologies, Inc.	NetApp, Inc.	Symantec Corporation
Autodesk, Inc.	Open Text Corporation	Synopsys, Inc.
CA, Inc.	Rackspace Hosting, Inc.	Unisys
Citrix Systems, Inc.	Red Hat, Inc.	VMware, Inc.

The chart below compares our revenue with the revenues of our compensation peer group.

LOGO

Revenue values are based off trailing twelve months revenues as of July 27, 2015, at which time the Committee made its annual compensation peer group determination.

For purposes of reviewing the 2015 pay levels of our peers, we conducted additional analysis based on excluding the four largest peer companies by revenue (Symantec Corporation, NetApp, Inc., VMware, Inc., and salesforce.com, Inc.).

Radford Compensation Surveys

Survey information collected from Radford was used in designing the components of long-term incentive compensation and for the core analysis of determining compensation for Ms. Nyquist and Ms. Davis. The Radford survey was used because it is focused on technology companies and technology-specific positions, and all of the companies in our current peer group participated in the survey.

Section 6: Severance and Change in Control Benefits

Agreements with Mr. Koehler and Mr. Wimmer

We do not maintain employment-related agreements with our named executive officers — other than an agreement with our CEO, Mr. Koehler, and certain agreements with our former Co-President, Mr. Wimmer, as described below.

Severance Agreement with Mr. Koehler

Mr. Koehler’s severance agreement was negotiated and approved prior to our spin off from NCR Corporation in 2007. In the event the Company terminates Mr. Koehler’s employment other than for “cause” or if he were to resign for “good reason”, in either case prior to a change in control, he would receive: (i) 150% of the sum of his annual base salary and target annual incentive opportunity; (ii) a pro-rata portion of his annual incentive opportunity; and (iii) medical benefits for a period of eighteen months.

Agreements with Mr. Wimmer

We entered into an employment agreement with Mr. Wimmer in 2013, and the employment agreement was amended effective February 27, 2015 to reflect the expanded scope of Mr. Wimmer’s duties as Co-President of Teradata until that role was eliminated effective December 1, 2015. The employment agreement, as is customary in countries such as Germany, included general references to his executive compensation elements such as base salary, annual bonus, and long-term incentive. In addition, the agreement contained a number of standard provisions for German employees, including those relating to pension benefits and contract termination rights requiring, in Mr. Wimmer’s case, one-year notice prior to a termination without cause.

Following his appointment as Co-President, Mr. Wimmer was required to relocate to Atlanta, Georgia from Germany. In connection with his expatriate assignment to the U.S. as Co-President, the Company agreed to provide Mr. Wimmer with certain relocation and expatriate benefits, consistent with Teradata compensation guidelines for expatriates and with market practices. These relocation and expatriate benefits include the following: (i) one-time moving and relocation benefits for the move to Atlanta, including a cash relocation allowance of $20,000; (ii) during the term of the expatriate assignment, ongoing housing assistance (up to $96,000 per year in housing support and payment of utilities up to $9,600 per year), dependent tuition assistance, a leased automobile (not to exceed $1,470 per month), tax equalization, and home leave assistance; and (iii) one-time moving and relocation benefits for repatriation to Germany at the conclusion of the expatriate assignment, including a $10,000 cash relocation allowance.

Change in Control Severance Plan

Each of our named executive officers — other than Mr. Wimmer — participates in the Teradata Change in Control Severance Plan (the “CIC Plan”), the objectives and provisions of which are summarized below:

Business Objectives

• Increased Retention Incentives. The CIC Plan enhances our retention incentives by reducing the personal uncertainty that arises from the possibility of a future business combination and promotes objectivity in the evaluation of transactions that are in the best interests of our stockholders.

• Alignment with Market Practices. Based on information provided by Semler Brossy, change in control arrangements are used by a vast majority of the companies included in our compensation peer group, and the terms of our CIC Plan are consistent with prevailing market practices.

Severance Provisions

• Severance Protections on Double Trigger. The CIC Plan provides for separation payments and benefits to our named executive officers, which were established by the Committee at the time of the spin off from NCR and are reviewed annually by the Committee. The CIC Plan provides benefits on a “double trigger,” meaning that the severance benefits are paid, and equity awards vest, if our executives incur a qualifying termination in connection with a change in control. The threshold for an acquisition of Teradata stock that would constitute a change in control is an acquisition of 50% or more of the Company’s outstanding common stock or voting securities.

• No Excise Tax Gross Ups. The CIC Plan does not allow for “gross-up” payments related to excise taxes that may be imposed under Section 280G of the Internal Revenue Code.

More information on our use of severance agreements and the CIC Plan, including the estimated payments and benefits payable to the named executive officers, is provided under the “Potential Payments Upon Termination or Change in Control” section beginning on page 67 of this proxy statement.

Section 7: Tax and Accounting Considerations

In structuring our executive compensation program, the Committee takes into the account the tax and accounting treatment of our executive compensation arrangements. One such consideration is the potential impact of the limitation on Teradata’s federal income tax deduction for certain compensation over $1 million paid to covered employees under Section 162(m) of the Internal Revenue Code (“Section 162(m)”). In cases that it deems appropriate, the Committee may structure our incentive compensation arrangements with the intention that such arrangements will qualify for an exemption

from Section 162(m) as performance-based compensation. However, the Committee has not adopted a policy that requires all compensation to be deductible because we want to preserve the ability to provide cash or equity compensation to an executive that is not deductible under Section 162(m) if we believe that it is in our stockholders’ best interests.

For example, annual incentive opportunities granted in 2015 to our named executive officers (other than Mr. Harrington) were paid under our Management Incentive Plan (the “MIP”), which is structured with the intention that bonuses paid under the MIP will qualify as deductible performance-based compensation for purposes of Section 162(m) of the Internal Revenue Code. The MIP provides annual incentive opportunities for each participating executive officer based on an incentive formula: 1.5% for the CEO and 0.75% for the other named executive officers of our earnings before income taxes (“EBIT”). EBIT was selected as the appropriate performance measure under the MIP since the level of EBIT reflects the operating strength and efficiency of the Company. The EBIT incentive formula establishes the maximum amount payable each year under the MIP for each participating executive officer; but the executives are not assured of earning this maximum amount, and it was not paid in prior years. Instead, the Committee has the authority to reduce the annual amount payable under the EBIT incentive formula based on its assessment of the extent to which the applicable financial and strategic goals are achieved under our annual bonus program, as described above. The Committee also retains discretion to adjust payouts under the MIP based on the quality of Company and individual performance and adherence to our ethics and compliance programs, among other things.

Similarly, our 2014-15 performance-based restricted share units included an initial performance hurdle that 2015 EBIT must equal or exceed $300 million. If this initial performance hurdle had not been achieved, none of the 2014-15 performance-based restricted share units would have been earned. Upon achievement of the initial performance hurdle, the 2014-15 performance-based restricted share units were earned at the maximum level (200% of target), subject to the Committee’s discretion to reduce the number of share units earned based on the level of achievement of the financial and strategic measures described above. This structure was adopted with the intention that the 2014-15 performance-based restricted share units would qualify as deductible performance-based compensation for purposes of Section 162(m).

COMPENSATION TABLES

2015 Summary Compensation

The following table summarizes the total compensation paid to, or earned by, each of our named executive officers for the fiscal year ended December 31, 2015 and the prior two fiscal years. The narrative following the table describes total compensation levels, current employment agreements and material employment terms for each of our named executive officers, as applicable. The 2015 Target Compensation supplemental table following this table also provides additional information regarding the 2015 total direct compensation levels for our named executive officers as approved by the Compensation Committee.


Name and Principal Position	Year		Salary ($)		Stock Awards⁽¹⁾ ($)		Option Awards⁽²⁾ ($)		Non-Equity Incentive Plan Compensation⁽³⁾ ($)		Change in Pension Value and NQ Deferred Compensation Earnings⁽⁴⁾ ($)		All Other Compensation⁽⁵⁾ ($)		Total ($)
Michael Koehler President and Chief Executive Officer		2015		800,000		3,892,068		1,345,435		320,000		—		15,180		6,372,683
		2014		800,000		3,322,368		1,995,720		315,000		—		15,045		6,448,133
		2013		786,849		2,491,131		2,611,170		367,188		—		14,809		6,271,147
Stephen Scheppmann EVP and Chief Financial Officer		2015		478,215		1,038,332		403,635		152,907		—		14,374		2,087,463
		2014		470,000		783,862		465,675		148,050		—		14,602		1,882,189
		2013		470,000		597,877		626,688		176,250		—		14,250		1,885,065

Robert Fair Chief Operating Officer		2015		528,384		2,306,558		672,717		185,387		—		14,569		3,707,615
		2014		410,000		919,062		598,713		129,150		—		14,397		2,071,322
		2013		410,000		597,877		626,688		153,750		—		14,061		1,802,376
Daniel Harrington EVP, International Region and Global Services		2015		443,633		2,198,178		470,900		142,308		—		14,569		3,269,588
		2014		410,000		919,062		598,713		129,150		—		14,397		2,071,322
		2013		410,000		597,877		626,688		153,750		—		14,061		1,802,376

Laura Nyquist General Counsel and Secretary		2015		342,229		502,787		179,396		71,127		—		14,332		1,109,871


Saundra Davis Chief Human Resource Officer		2015		280,600		389,320		145,752		58,251		—		13,828		887,751


Hermann Wimmer⁽⁶⁾ Former Co-President		2015		517,614		1,330,380		—		181,731		—		493,622		2,523,347
		2014		491,097		919,062		598,713		154,696		1,025,825		24,635		3,214,028
		2013		494,129		597,877		626,688		185,298		210,971		23,774		2,138,737

(1)

This column shows the aggregate grant date fair value, as determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation (“FASB ASC Topic 718”), of performance-based restricted share units (“PBRSUs”) and service-based restricted share units (“RSUs”) granted to our named executive officers in the applicable year. For 2015, this column includes the following annual awards:

•

PBRSUs that were approved in December 2014 and granted in February 2015 when the Committee established the performance goals for such awards; and

•

RSUs that were granted in February 2015 to Messrs. Fair and Wimmer in connection with the expansion of their responsibilities resulting from the management restructuring, RSUs that were granted in May 2015 to Mr. Harrington for retention purposes following the restructuring, and the annual grant of RSUs to the named executive officers, other than Mr. Wimmer, in December 2015.

For the PBRSUs granted in February 2015, the following table sets forth the target number of units, their “target” grant date fair value reflected in the Stock Awards column above, and their grant date fair value assuming that the highest level of performance would be achieved. The number of units delivered for these PBRSUs to the named executive officers was 10% of the target opportunity, which reflects 0% for the financial measures and the achievement of 33% for the strategic measures.


Name	Target Number of Annual PBRSUs (#)		Probable Grant Date Fair Value		Maximum Grant Date Fair Value
Michael Koehler		45,641	$	1,939,743	$	3,879,486
Stephen Scheppmann		10,650	$	452,625	$	905,250
Robert Fair		13,692	$	581,910	$	1,163,820
Daniel Harrington		13,692	$	581,910	$	1,163,820
Laura Nyquist		5,705	$	242,463	$	484,926
Saundra Davis		4,184	$	177,820	$	355,640
Hermann Wimmer		13,692	$	581,910	$	1,163,820

See Note 5 of the Notes to Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended December 31, 2015 (our “2015 Annual Report”) for an explanation of the assumptions made in valuing the awards reported in this column.

(2)

This column shows the aggregate grant date fair value, as determined in accordance with FASB ASC Topic 718, of the stock options granted to our named executive officers for the applicable year. See Note 5 of the Notes to Consolidated Financial Statements contained in our 2015 Annual Report for an explanation of the assumptions made in valuing these awards. For information about the stock option awards granted in 2015, see the 2015 Grants of Plan-Based Awards section beginning on page 60 of this proxy statement.

(3)

This column reflects the cash bonus paid to our named executive officers under the annual bonus program for the applicable year. For more information concerning the 2015 annual incentive, see the Annual Bonus Awards discussion in the Compensation Discussion and Analysis section beginning on page 43 of this proxy statement.

(4)

Mr. Wimmer participates in a German pension plan that is available to all German employees. This column reflects the increase in the present value of the accumulated benefit of his pension benefit for the applicable year. In 2015, the present value of the accumulated benefit of Mr. Wimmer’s pension benefit decreased by $70,921. We do not maintain a pension plan for U.S. employees.

(5)	The amounts reported in this column for 2015 include the following:

•

The dollar value of premiums paid to maintain life insurance for the benefit of each of Messrs. Koehler, Scheppmann, Fair, and Harrington and Mses. Nyquist and Davis in the amount of $1,930, $1,512, $1,319, $1,319, $1,082 and $865, respectively, under the Company’s life insurance program that is generally available to all U.S. employees;

•

The dollar value of matching contributions to our 401(k) plan, which are generally available to all plan participants and were made in 2015 on behalf of each of Messrs. Koehler, Scheppmann, Fair, and Harrington, and Mses. Nyquist and Davis in the amount of $13,250, $12,862, $13,250, $13,250, $13,250 and $12,963 respectively; and

•

For Mr. Wimmer: (i) the dollar value of premiums paid to maintain life insurance in the amount of $87 under Teradata Germany’s life insurance program and the dollar value of company contributions to a direct insurance private pension fund in the amount of $474, both of which are generally available to all German employees; and (ii) a home office allowance in the amount of $530, and the total annual automobile lease value paid by the company of $12,261, both of which are generally available to management employees in Germany. Additionally,

effective August 1, 2015, Mr. Wimmer began an expatriate assignment in the United States and his expatriate benefits include the following amounts: $321,123 for tax gross up payments and related tax consulting costs, $67,085 for housing and utilities, $44,754 for relocation expenses, $26,953 for dependent school tuition, $8,317 for automobile lease, $7,486 for immigration and visa fees, and $4,552 for home leave travel costs.

(6)

As of December 1, 2015, Mr. Wimmer ceased to be an executive officer of the Company. Mr. Wimmer’s cash compensation and benefits were paid in euros for the year ending December 31, 2015. The amounts presented in this summary compensation table have been converted from euros to U.S. dollars using the average exchange rate of €1 = $1.1046875.

2015 Target Compensation

In December 2015, the Committee approved the long-term incentive award opportunity for each named executive officer. The long-term incentive opportunity was allocated as follows: (i) 20% to stock options, which are reflected in the “Option Awards” column for 2015, (ii) 30% to RSUs, which are reflected in the “Stock Awards” column for 2015, and (iii) 50% to PBRSUs. The PBRSUs that were approved in 2015 are not reflected in the “Stock Awards” column for 2015 due to the fact that they do not have a “grant date” for financial accounting purposes until the Committee establishes the performance goals in the first quarter of 2016. Instead, the “Stock Awards” column for 2015 includes the PBRSUs that were approved by the Committee in December 2014 and for which the Committee established the applicable performance goals in February 2015 for the 2015 performance period. As a result, the Summary Compensation Table does not reflect the manner in which the Committee viewed or determined the 2015 long-term equity or annual total compensation values for our named executive officers. The following table shows the target total direct compensation levels for our named executive officers as viewed by the Committee in December 2015.


Name	Salary ($)		Target Value Annual Incentive ($)		Target Value of PBRSU Awards ($)		Target Value of RSU Awards ($)		Target Value of Option Awards ($)		Total Direct Compensation ($)
Michael Koehler		800,000		1,000,000		3,000,000		1,800,000		1,200,000		7,800,000
Stephen Scheppmann		479,400		479,400		900,000		540,000		360,000		2,758,800
Robert Fair		550,000		605,000		1,500,000		900,000		600,000		4,155,000
Daniel Harrington		460,020		460,020		1,050,000		630,000		420,000		3,020,040
Laura Nyquist		343,077		223,000		400,000		240,000		160,000		1,366,077
Saundra Davis		282,295		183,492		325,000		195,000		130,000		1,115,787
Hermann Wimmer⁽¹⁾		537,442		591,186		0		0		0		1,128,628

(1)	Mr. Wimmer’s cash compensation was paid in euros for the year ending December 31, 2015. The amounts presented in this table have been converted from euros to U.S. dollars using the average exchange rate of €1 = $1.1046875.

Employee Agreements and Material Employment Terms

We maintain letter agreements with each of the named executive officers who are based in the United States. Each letter agreement sets forth, among other things, the following terms relating to the officer’s at-will employment: (i) annual base salary and annual incentive award opportunity; (ii) a statement of eligibility for participation in our change in control severance plan; and (iii) a statement of the vacation and health and welfare benefits available to each officer. In addition, by accepting the terms of the letter, each named executive officer agreed to the following covenants during and for twelve months following his or her termination of employment, unless such covenants are waived by the board: (x) not to render services directly or indirectly to a competing organization; (y) not to directly

or indirectly recruit, hire, solicit or induce, or attempt to induce, any exempt employee of Teradata to terminate his or her employment with or otherwise cease his or her relationship with Teradata; and (z) not to solicit the business of any firm or company, including customers, with whom the officer worked during the last two years of employment.

The letter agreement with Mr. Koehler also establishes the terms of his severance benefits upon a qualifying termination prior to a change in control and specifies that he is eligible to participate as a Tier I participant in our change in control severance plan. Please refer to the “Potential Payments Upon Termination or Change in Control” section of this proxy statement for information regarding potential payments and benefits that Mr. Koehler is entitled to receive under his offer letter in connection with his termination of employment.

In connection with the elimination of Mr. Wimmer’s Co-President position, we have been negotiating the terms of certain arrangements that will apply to his separation from Teradata and its German subsidiary with whom he has an employment agreement, but no final arrangements have been reached. The terms and conditions of any material separation arrangements with Mr. Wimmer, whether as a result of negotiations or judicial action, will be publicly disclosed to shareholders as that information is determined or becomes available. Please refer to the “Potential Payments Upon Termination or Change in Control” section of this proxy statement for information regarding potential payments and benefits that Mr. Wimmer would have been entitled to receive under his employment agreement if his employment had been terminated on December 31, 2015.

2015 Grants of Plan-Based Awards

The following table summarizes information for each named executive officer regarding (i) estimated payouts that could have been earned under the 2015 annual bonus program, (ii) stock options that were approved by the Committee in December 2015, (iii) RSUs that were approved by the Committee in February, May and December 2015, and (iv) estimated payouts under the annual PBRSUs that were approved by the Committee in December 2014 and for which performance goals were established in February 2015.


Name	Grant Date		Approval Date⁽¹⁾		Estimated Possible Payouts Under Non-Equity Incentive Plan Awards⁽²⁾						Estimated Possible Payouts Under Equity Incentive Plan Awards⁽³⁾						All Other Stock Awards: Number of Shares of Stock Units⁽⁴⁾		Option Awards: Number of Shares Underlying Options⁽⁵⁾		Exercise or Base Price of Option Awards⁽⁶⁾		Grant Date Fair Value of Stock and Option Awards⁽⁷⁾
Name	Grant Date		Approval Date⁽¹⁾		Threshold ($)		Target ($)		Maximum ($)		Threshold (#)		Target (#)		Maximum (#)		(#)		(#)		($/sh)		($)
Michael Koehler
Bonus program						—		1,000,000		2,000,000
Options		12/1/2015		12/1/2015																118,332		30.63		1,345,435
RSUs		12/1/2015		12/1/2015														63,739						1,952,326
PBRSUs		2/9/2015		12/1/2014								11,410		45,641		91,282								1,939,743
Stephen Scheppmann
Bonus program						—		477,833		955,666
Options		12/1/2015		12/1/2015																35,500		30.63		403,635
RSUs		12/1/2015		12/1/2015														19,122						585,707
PBRSUs		2/9/2015		12/1/2014								2,663		10,650		21,300								452,625
Robert Fair
Bonus program						—		579,333		1,158,666
Options		12/1/2015		12/1/2015																59,166		30.63		672,717
RSUs		2/27/2015		2/24/2015														16,812						748,470
RSUs		12/1/2015		12/1/2015														31,870						976,178
PBRSUs		2/9/2015		12/1/2014								3,423		13,692		27,384								581,910
Daniel Harrington
Bonus program						—		444,713		889,426
Options		12/1/2015		12/1/2015																41,416		30.63		470,900
RSUs		5/15/2015		5/14/2015														23,196						932,943
RSUs		12/1/2015		12/1/2015														22,309						683,325
PBRSUs		2/9/2015		12/1/2014								3,423		13,692		27,384								581,910
Laura Nyquist
Bonus program						—		222,271		444,542
Options		12/1/2015		12/1/2015																15,778		30.63		179,396
RSUs		12/1/2015		12/1/2015														8,499						260,324
PBRSUs		2/9/2015		12/1/2014								1,426		5,705		11,410								242,463
Saundra Davis
Bonus program						—		182,035		364,070
Options		12/1/2015		12/1/2015																12,819		30.63		145,752
RSUs		12/1/2015		12/1/2015														6,905						211,500
PBRSUs		2/9/2015		12/1/2014								1,046		4,184		8,368								177,820
Hermann Wimmer⁽⁸⁾
Bonus program						—		567,908		1,135,816
RSUs		2/27/2015		2/24/2015														16,812						748,470
PBRSUs		2/9/2015		12/1/2014								3,423		13,692		27,384								581,910

(1)

The Committee approves the annual equity awards for our named executive officers other than Mr. Koehler. In consultation with the Committee, the independent members of the board approve Mr. Koehler’s annual equity award. In general, the grant date of the annual equity awards is the date the independent members of the board

approve Mr. Koehler’s annual equity award, which for 2015 was the day of the annual awards meeting of the Committee. The grant date of the PBRSUs, however, occurs in the first quarter of the year immediately following the year of approval, which is when the Committee establishes the applicable performance goals. Therefore, this table reflects PBRSUs that were approved by the Committee in December 2014 and for which the Committee established performance goals in the first quarter of 2015. The PBRSUs that were approved by the Committee in December 2015 are not reflected in the table above because they do not have a “grant date” for financial accounting purposes until the Committee establishes the performance goals in the first quarter of 2016.

(2)

The information included in the “Threshold”, “Target” and “Maximum” columns reflects the range of potential payouts under the 2015 annual bonus program when the performance goals were established by the Committee. The actual amounts of the annual incentive awards earned for 2015 are reflected in the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table. Mr. Wimmer’s incentive awards are payable in euros and have been converted from euros to U.S. dollars using the average exchange rate of €1 = $1.1046875.

(3)

The information included in the “Threshold”, “Target” and “Maximum” columns reflects the range of potential payouts under the PBRSUs that were approved by the Committee in December 2014 for the 2015 performance period. The units earned generally vest in three equal installments over a 3-year period with the performance determination date being the first vesting date, provided the executive remains employed by the Company. Dividends, if any, paid on the underlying shares during the vesting period are accumulated and reinvested in additional units.

(4)

Reflects shares underlying the RSUs that were approved by the Committee in December 2015. These RSUs generally vest in three equal installments on the first three anniversaries of the date of grant, provided that the executive remains employed by the Company. Dividends, if any, paid on the underlying shares during the vesting period are accumulated and reinvested in additional units. This column also reflects a one-time grant of RSUs to Messrs. Fair and Wimmer in February 2015 which vest in three equal installments on the first three anniversaries of the date of grant, provided that the executive remains employed by the Company and a one-time grant of RSUs to Mr. Harrington in May 2015 which vests in full on the third anniversary of the date of grant, provided he remains employed by the Company.

(5)

Reflects the number of common shares that may be issued on exercise of stock options that were approved by the Committee in December 2015. These options generally vest in four equal installments on the first four anniversaries of the date of grant for so long as the executive remains employed by the Company.

(6)	Reflects the exercise price for each stock option reported in the table, which equals the fair market value of the underlying shares on the date of grant.

(7)	Reflects the aggregate grant date fair value, as determined in accordance with FASB ASC Topic 718, of the stock options, PBRSUs and RSUs. See footnotes 1 and 2 of the Summary Compensation Table on page 56 of this proxy statement for the assumptions used to calculate these values.

(8)	Mr. Wimmer’s cash compensation was paid in euros for the year ending December 31, 2015. The amounts presented in this table have been converted from euros to U.S. dollars using the average exchange rate of €1 = $1.1046875.

2015 Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information for each named executive officer with respect to (i) each stock option that had not been exercised and remained outstanding as of December 31, 2015, (ii) each award of restricted shares, RSUs and PBRSUs that had not vested and remained outstanding as of December 31, 2015, and (iii) the Special 2016 PBRSUs and Long-Term Strategic PBRSUs (as defined in footnote 6 below).


Name	Grant Date		Option Awards								Stock Awards				Equity Incentive Plan Awards
			Number of Securities Underlying Unexercised Options⁽¹⁾ (#)		Number of Securities Underlying Unexercised Options⁽²⁾ (#)		Option Exercise Price⁽³⁾ ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested⁽⁴⁾ (#)		Market Value of Shares or Units of Stock That Have Not Vested⁽⁵⁾ ($)		Number of Unearned Shares, Units or Other Rights that have not Vested⁽⁶⁾ (#)		Market Value of Unearned Shares, Units or Other Rights that have not Vested⁽⁷⁾ ($)
			Exercisable		Unexercisable		Option Exercise Price⁽³⁾ ($)		Option Expiration Date
Michael Koehler		12/1/2015				118,332		30.63		11/30/2025		63,739		1,683,984
		2/9/2015										4,564		120,581
		12/1/2014		28,236		84,708		44.43		11/30/2024		30,428		803,908
		12/3/2013		72,532		72,533		45.35		12/2/2023		27,983		739,311
		3/1/2013														30,000		792,600
		11/27/2012		81,630		27,211		61.55		11/26/2022
		11/29/2011		124,434				50.70		11/28/2021
		11/30/2010		157,467				41.09		11/29/2020
		12/1/2009		186,503				30.68		11/30/2019
		12/2/2008		679,612				13.77		12/1/2018
		10/1/2007		148,386				27.98		9/30/2017
Stephen Scheppmann		12/1/2015				35,500		30.63		11/30/2025		19,122		505,203
		2/9/2015										1,065		28,137
		12/1/2014		6,588		19,766		44.43		11/30/2024		7,100		187,582
		12/3/2013		17,408		17,408		45.35		12/2/2023		6,716		177,437
		3/1/2013														20,000		528,400
		11/27/2012		19,591		6,531		61.55		11/26/2022
		11/29/2011		28,606				50.70		11/28/2021
		11/30/2010		32,579				41.09		11/29/2020
		12/1/2009		39,632				30.68		11/30/2019
		12/2/2008		18,631				13.77		12/1/2018
		10/1/2007		50,752				27.98		9/30/2017
Robert Fair		12/1/2015				59,166		30.63		11/30/2025		31,870		842,005
		2/27/2015										16,812		444,173
		2/9/2015										1,369		36,169
		12/1/2014		8,470		25,413		44.43		11/30/2024		9.129		241,188
		12/3/2013		17,408		17,408		45.35		12/2/2023		6,716		177,437
		3/1/2013														20,000		528,400
		11/27/2012		19,591		6,531		61.55		11/26/2022
		11/29/2011		28,606				50.70		11/28/2021
		11/30/2010		39,819				41.09		11/29/2020
		12/1/2009		41,963				30.68		11/30/2019
		12/2/2008		135,922				13.77		12/1/2018
		10/1/2007		15,376				27.98		9/30/2017
Daniel Harrington		12/1/2015				41,416		30.63		11/30/2025		22,309		589,404
		5/15/2015										23,196		612,838
		2/9/2015										1,369		36,169
		12/1/2014		8,470		25,413		44.43		11/30/2024		9.129		241,188
		12/3/2013		17,408		17,408		45.35		12/2/2023		6,716		177,437
		3/1/2013														20,000		528,400
		11/27/2012		19,591		6,531		61.55		11/26/2022
		11/29/2011		28,606				50.70		11/28/2021
		11/30/2010		29,865				41.09		11/29/2020
		1/3/2000										7,777		205,468


Name	Grant Date		Option Awards								Stock Awards				Equity Incentive Plan Awards
			Number of Securities Underlying Unexercised Options⁽¹⁾ (#)		Number of Securities Underlying Unexercised Options⁽²⁾ (#)		Option Exercise Price⁽³⁾ ($)		Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested⁽⁴⁾ (#)		Market Value of Shares or Units of Stock That Have Not Vested⁽⁵⁾ ($)		Number of Unearned Shares, Units or Other Rights that have not Vested⁽⁶⁾ (#)		Market Value of Unearned Shares, Units or Other Rights that have not Vested⁽⁷⁾ ($)
			Exercisable		Unexercisable		Option Exercise Price⁽³⁾ ($)		Option Expiration Date
Laura Nyquist		12/1/2015				15,778		30.63		11/30/2025		8,499		224,544
		2/9/2015										571		15,086
		12/1/2014		3,529		10,589		44.43		11/30/2024		3,804		100,502
		12/3/2013		8,704		8,704		45.35		12/2/2023		3,358		88,718
		11/27/2012		9,795		3,266		61.55		11/26/2022
		11/29/2011		15,603				50.70		11/28/2021
		11/30/2010		19,910				41.09		11/29/2020
		12/1/2009		23,313				30.68		11/30/2019
		12/2/2008		52,379				13.77		12/1/2018
		10/1/2007		17,763				27.98		9/30/2017
		3/1/2007		6,129				24.87		2/28/2017
		2/13/2006		3,319				20.84		2/13/2016
Saundra Davis		12/1/2015				12,819		30.63		11/30/2025		6,905		182,430
		2/9/2015										418		11,044
		12/1/2014		2,588		7,765		44.43		11/30/2024		2,790		73,712
		12/3/2013		7,253		7,253		45.35		12/2/2023		2,798		73,923
		11/27/2012		8,163		2,721		61.55		11/26/2022
		11/29/2011		13,003				50.70		11/28/2021
		11/30/2010		16,290				41.09		11/29/2020
		12/1/2009		18,650				30.68		11/30/2019
Hermann Wimmer		2/27/2015										16,812		444,173
		2/9/2015										1,369		36,169
		12/1/2014		8,470		25,413		44.43		11/30/2024		9,129		241,188
		12/3/2013		17,408		17,408		45.35		12/2/2023		6,716		177,437
		3/1/2013														20,000		528,400
		11/27/2012		19,591		6,531		61.55		11/26/2022
		11/29/2011		23,405				50.70		11/28/2021
		11/30/2010		32,579				41.09		11/29/2020
		12/1/2009		39,632				30.68		11/30/2019
		12/2/2008		41,214				13.77		12/1/2018
		10/1/2007		22,839				27.98		9/30/2017
		3/1/2007		9,806				24.87		2/28/2017
		11/1/2006		13,914				22.31		10/31/2016

(1)	This column shows the number of common shares underlying outstanding stock options that have vested as of December 31, 2015.

(2)	This column shows the number of common shares underlying outstanding stock options that have not vested as of December 31, 2015. The remaining vesting dates for each award are as follows:


Grant Date	Remaining Vesting Dates	Vesting Schedule
11/27/2012	11/27/2016	25% vests each year for four years after the date of grant
12/3/2013	12/3/2016, 12/3/2017	25% vests each year for four years after the date of grant
12/1/2014	12/1/2016, 12/1/2017, 12/1/2018	25% vests each year for four years after the date of grant
12/1/2015	12/1/2016, 12/1/2017, 12/1/2018, 12/1/2019	25% vests each year for four years after the date of grant

(3)	This column shows the exercise price for each stock option reported in the table, which equaled the fair market value per share on the date of grant.

(4)	This column shows the aggregate number of restricted shares and RSUs outstanding as of December 31, 2015. The remaining vesting dates for each award are as follows:


Grant Date	Remaining Vesting Dates	Vesting Schedule
1/3/2000	4/30/2018	100% vests on 55^th birthday
12/3/2013	12/3/2016	100% vests three years from the date of grant
12/1/2014	12/1/2016, 12/1/2017	1/3 increments each year for three years after the date of the grant
2/9/2015	2/7/2016, 2/7/2017, 2/7/2018*	1/3 increments over a 3-year time period after performance level determination is made by the Committee (*Mr. Koehler’s 2/9/15 grant has remaining vest dates of 1/26/16, 1/26/17 and 1/27/18)
2/27/2015	2/27/2016, 2/27/2017, 2/27/2018	1/3 increments each year for three years after the date of the grant
5/15/2015	5/15/2018	100% vests three years from the date of grant
12/1/2015	12/1/2016, 12/1/2017, 12/1/2018	1/3 increments each year for three years after the date of the grant

(5)	This column shows the aggregate dollar value of the restricted shares and RSUs using the closing stock price on December 31, 2015 of $26.42 per share.

(6)

In December 2012, the Committee approved special 2016 performance-based restricted share units which were made in connection with the restructuring of our management team at that time as an additional incentive to retain participating executives and drive strong performance. On February 26, 2013, the Committee amended the special grant to allocate it between two separate awards: (i) 70% of the units were allocated to 2016 performance-based restricted share units (“Special 2016 PBRSUs”); and (ii) 30% of the units were allocated to special long-term strategic performance-based restricted share units (“Long-Term Strategic PBRSUs”). This modification was intended to focus our named executive officers on achieving both financial and strategic objectives.

This column shows the aggregate number of Special 2016 PBRSUs and Long-Term Strategic PBRSUs outstanding as of December 31, 2015, assuming threshold achievement level of 50%, as achievement of the challenging threshold performance goals is not reasonably probable at this time. These awards, if earned, would vest in March 2017, based upon achievement of the applicable performance goals, as determined by the Committee after the close of the 2016 performance year.

(7)

This column shows the aggregate dollar value of the Special 2016 PBRSUs and Long-Term Strategic PBRSUs at the threshold achievement level using the closing stock price on December 31, 2015 of $26.42 per share, as achievement of the challenging threshold performance goals is not reasonably probable at this time.

2015 Option Exercises and Stock Vested

The following table sets forth information for each named executive officer with respect to (i) the exercise of stock options in 2015, and (ii) the vesting of PBRSUs and RSUs during 2015.


Name	Option Awards				Stock Awards
Name	Number of Shares Acquired on Exercise (#)		Value Realized on Exercise⁽¹⁾ ($)		Number of Shares Acquired on Vesting (#)		Value Realized on Vesting⁽²⁾ ($)
Michael Koehler		—		—		43,428		1,427,230
Stephen Scheppmann		—		—		10,236		335,689
Robert Fair		—		—		11,250		366,747
Daniel Harrington		—		—		11,250		366,747
Laura Nyquist		7,769		183,537		5,333		175,598
Saundra Davis		20,961		589,721		4,254		140,511
Hermann Wimmer		12,292		78,498		10,889		350,925

(1)	The value realized on exercise equals the number of shares exercised multiplied by the excess of the closing market price of our common stock on the exercise date over the exercise price per share.

(2)	The value realized on vesting equals the number of shares acquired multiplied by the closing market price of our common stock on the acquisition date.

Pension Benefits

Mr. Wimmer participates in a pension plan sponsored by Teradata GmbH (the “German Pension Plan”). The German Pension Plan is a defined benefit plan for all employees based in Germany. The German Pension Plan provides for post-retirement payments based on the employee’s pensionable income and years of service at the time of retirement. Pensionable income under the German Pension Plan includes base salary and, in Mr. Wimmer’s case, any payments out of the Company’s annual bonus program. The German Pension Plan benefit is calculated as follows: for each year of service, a pension module is calculated; the module amounts to (a) 0.3% of pensionable income below the year’s German social security compensation cap (“SSCC”), and (b) 1.65% of pensionable income above the SSCC. At retirement, the sum of all years’ modules is paid as an annual pension. The normal retirement age is 63, and there is a surviving spouse benefit equal to 60% of the employee’s pension benefit.

The following table sets forth information with respect to Mr. Wimmer’s accumulated pension benefits as of December 31, 2015 under the German Pension Plan. We do not maintain a pension plan for U.S. employees.


Name	Number of Years Credited Service (#)	Present Value of Accumulated Benefit⁽¹⁾ ($)	Payments During Last Fiscal Year ($)
Michael Koehler	—	—	—
Stephen Scheppmann	—	—	—
Robert Fair	—	—	—
Daniel Harrington	—	—	—
Laura Nyquist	—	—	—
Saundra Davis	—	—	—
Hermann Wimmer⁽¹⁾	19.5	2,324,677	0

(1)

Mr. Wimmer’s accumulated benefit is based on service and compensation through December 31, 2015. The actuarial present value has been calculated assuming that Mr. Wimmer remains in service until age 63. The discount rate assumption is 2.50%, the pension indexation assumption is 2.00%, and the mortality assumption is based on the Heubeck 2005 G mortality table. The amount presented in this table for Mr. Wimmer has been converted from euros to U.S. dollars using the average exchange rate of €1 = $1.1046875.

Non-qualified Deferred Compensation

We have not adopted any non-qualified defined contribution plans or other deferred compensation plans.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

Background

We have entered into agreements and maintain plans and arrangements that require us to pay or provide compensation and benefits to our named executive officers in the event of certain terminations of employment or a change in control. The estimated amount payable or provided to each named executive officer in each situation is summarized below. These estimates are based on the assumption that the various triggering events occurred on the last day of 2015, along with other material assumptions noted below. The actual amounts that would be paid to a named executive officer upon termination or a change in control can only be determined at the time the actual triggering event occurs.

The estimated amount of compensation and benefits described below does not take into account compensation and benefits that a named executive officer has earned prior to the applicable triggering event, such as equity awards that have previously vested in accordance with their terms or vested benefits otherwise payable under our compensation programs. As a result, the estimates below do not provide information on the payout of 2015 incentive awards under our annual bonus programs, because these awards were earned under that plan as of December 31, 2015, subject to Committee approval regardless of whether the executive terminated employment or a change in control occurred on that date. Please refer to the Outstanding Equity Awards at Fiscal Year-End table for a complete summary of each named executive officer’s vested equity awards as of December 31, 2015, and to the Summary Compensation Table for the annual incentives earned by our named executive officers in 2015.

Non-Change in Control Scenarios

Treatment of Equity Awards on Termination of Employment (not in Connection with a Change in Control)

The following chart summarizes the vesting treatment of our equity awards in the event of termination of employment, other than termination in connection with a change in control. The vesting treatment described below is conditioned upon the participant’s compliance with non-competition and non-solicitation provisions for a twelve-month period (or, if applicable law requires a shorter period, for the maximum period allowed under applicable law), as well as confidentiality restrictions. Our PBRSUs and RSUs generally pay out upon vesting. However, to the extent necessary to comply with Section 409A of the Internal Revenue Code and avoid triggering adverse tax consequences to our executives, payment of vested PBRSUs and RSUs may be delayed until termination of employment, six months after termination of employment, or the end of the scheduled performance or service period.