Still waiting on official figures on employee retention to be announced, but it's fair to say all preferred concerted so whatever % employees owner will convert for a decent portion of the buy out price. Say the retention piece is 10% or $370M, an employee that had 0.10% should walk away with ~$3.3M ($3.7B x 90% x 0.10%) plus anything they get under retention
It looks like the acquisition price was about ~$14 or so. From the S1, it looks like the following:
2014 employees had strike prices of $1.70-$2.43
2015 employees had strike prices of $4.48-$7.02
2016 employees had strike prices of $8.10-$12.94
For the employees who didn't exercise and hold the shares for over a year, this exit might have been worse than an IPO. In the IPO scenario, they would have the option to hold the shares for more than a year which would make them eligible for long term capital gains. In this case, the employees with options will probably be taxed ordinary income tax which can be over 50% in some cases.
While they will still have a great exit, such a high tax rate is still painful. Sometimes for a company as solid as AppDynamics, it is worth it to exercise early.
If you don't have money to exercise early, companies like the Employee Stock Option Fund exist to help cover the costs of exercise and potential taxes.