Item 2.02 Results of Operations and Financial Condition.
The information under this Item 2.02, including the press release attached
hereto as Exhibit 99.1, is intended to be furnished and shall not be deemed
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933, as amended, or the Exchange Act, except as expressly
set forth by specific reference in such filing.
On October 6, 2021, Citrix Systems, Inc. (the "Company') issued a press release
that included preliminary unaudited revenue information for the quarter ended
September 30, 2021. A copy of the related press release is attached hereto as
Exhibit 99.1 and is incorporated into this Item 2.02 by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On October 4, 2021, the Board of Directors (the "Board") of the Company
appointed Robert M. Calderoni as Interim Chief Executive Officer and President
(and "principal executive officer") of the Company. Mr. Calderoni succeeds David
J. Henshall in such roles. Mr. Calderoni will continue in his existing role as
Chairman of the Board.
Mr. Calderoni, age 61, has served as a member of the Board since June 2014 and
was appointed as Chairman of the Board in January 2019. Prior to serving as
Chairman of the Board, Mr. Calderoni served as Executive Chairman of the Board
from July 2015 through December 2018. In addition, from October 2015 through
January 2016, Mr. Calderoni served as the Interim Chief Executive Officer and
President of the Company. Mr. Calderoni served as Chairman and Chief Executive
Officer of Ariba, Inc., a cloud applications and business network company, from
October 2001 until it was acquired by SAP, a publicly-traded software and IT
services company, in October 2012, and then continued as Chief Executive Officer
of Ariba following the acquisition until January 2014. Mr. Calderoni also served
as a member of the global managing board at SAP AG between November 2012 and
January 2014 and as President SAP Cloud at SAP AG from June 2013 to January
2014. Mr. Calderoni has also held senior finance roles at Apple and IBM and
served as Chief Financial Officer of Avery Dennison Corporation. Mr. Calderoni
previously served on the Boards of Directors of Juniper Networks, Inc., a
publicly-traded networking company from 2003 to 2019, and LogMeIn, Inc., a then
publicly-traded remote access and remote software company, from 2017 to 2020.
Since 2007, Mr. Calderoni has served on the Board of Directors of KLA-Tencor, a
publicly-traded semiconductor equipment company; and since March 2020,
Mr. Calderoni has served on the Board of Directors of Ansys, Inc., a
publicly-traded engineering simulation software provider ("Ansys").
There are no other arrangements or understandings between Mr. Calderoni and any
other person pursuant to which Mr. Calderoni was appointed as Interim Chief
Executive Officer and President of the Company. Mr. Calderoni is not a party to
any transaction that would require disclosure under Item 404(a) of
Regulation S-K.
The Company entered into an Employment Agreement with Mr. Calderoni on
October 5, 2021, in connection with his appointment as Interim Chief Executive
Officer and President of the Company, effective as of October 1, 2021. The
Employment Agreement has a term that ends on the earlier of (a) September 30,
2022 and (b) the commencement of employment of a permanent Chief Executive
Officer of the Company. The Employment Agreement provides for Mr. Calderoni to
be paid a base salary of $1.0 million. In addition, Mr. Calderoni will be
eligible to receive annual target incentive compensation of $1.5 million, with a
guaranteed minimum cash incentive of $500,000 for 2021, based on achievement of
performance metrics as determined by the Compensation Committee of the Board and
approved by the Board. In connection with his appointment as Interim Chief
Executive Officer and
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President of the Company, Mr. Calderoni will receive an equity grant of
restricted stock units with an aggregate value of $19.3 million (the "TRSUs")
that will vest in twelve monthly installments, subject to his continued service
relationship with the Company. Mr. Calderoni also will be entitled to
participate in all employee benefit plans or programs of the Company generally
available to any of its senior executive employees as well as certain other
benefits described in the Employment Agreement.
In the event that Mr. Calderoni's employment is terminated due to death or
"disability" (as defined in the Employment Agreement), Mr. Calderoni will be
entitled to receive a pro-rata bonus for the year of termination, subject to the
execution of a separation and release agreement by him (or his authorized
representative or estate) containing, among other provisions, a general release
of claims in favor of the Company, and all of the outstanding and unvested TRSUs
and any other outstanding and unvested equity awards held by Mr. Calderoni shall
fully vest on the date of such termination. After the term of the Employment
Agreement, if Mr. Calderoni remains in service as a member of the Board, this
acceleration right will continue to apply to Mr. Calderoni's outstanding and
unvested equity awards in the event his service to the Board terminates on
account of his death or disability.
In the event that Mr. Calderoni's employment is terminated without "cause" or he
resigns his position for "good reason" (each as defined in the Employment
Agreement), he will be entitled to receive a pro-rata bonus for the year of
termination and all of the outstanding and unvested TRSUs shall fully vest on
the date of such termination. In the event that Mr. Calderoni's employment is
terminated without cause or he resigns his position for good reason, in either
case upon or within the 18-month period following a "change in control" (as
defined in the Employment Agreement), he will be entitled to receive the
following, in lieu of the severance benefits described above: (i) a lump sum
payment equal to one and one-half times the sum of his annual base salary plus
his annual target incentive compensation described above; (ii) a pro-rata bonus
for the year of termination; (iii) continued health coverage for 18 months; and
(iv) full accelerated vesting of any unvested and outstanding TRSUs. In
addition, Mr. Calderoni would be eligible to receive a lump sum cash payment of
$3.375 million for the extension of his non-competition and non-solicitation
agreement for an additional six months. The foregoing severance payments and
benefits under the Employment Agreement are subject to the delivery of an
effective separation and release agreement by Mr. Calderoni containing, among
other provisions, a general release of claims in favor of the Company. The
Employment Agreement does not provide for any tax gross-up payments. The
foregoing summary of the Employment Agreement with Mr. Calderoni does not
purport to be complete and is subject to, and qualified in its entirety by, the
full text of the Employment Agreement.
In connection with Mr. Calderoni's appointment, Mr. Henshall will transition
from serving as President and Chief Executive Officer of the Company to serving
as an advisor to the Company's Chief Executive Officer. As part of this
transition, on October 5, 2021, the Company entered into a second amendment to
the existing Employment Agreement with Mr. Henshall providing for, among other
things: (a) a reduction in his base salary to $100,000; (b) annual cash
incentive compensation for 2021 based on actual achievement of the relevant
performance metrics and pro-rated for the portion of the performance year
completed as of the date of the amendment; and (c) no additional entitlement to
annual cash or equity incentive awards after the date of the amendment.
Mr. Henshall will remain entitled to certain payments and accelerated vesting of
outstanding equity awards upon termination of his employment with the Company
under certain circumstances as provided in the Employment Agreement as amended.
A summary of Mr. Henshall's Employment Agreement is set forth in the Company's
proxy statement for its 2021 Annual Meeting of Shareholders filed with the SEC
on April 16, 2021 under the caption "Executive Compensation-Potential Payments
upon Termination or Change in Control-President and Chief Executive Officer,"
which summary is incorporated herein by reference. The foregoing summary of the
Second Amendment to Employment Agreement with Mr. Henshall does not purport to
be complete and is subject to, and qualified in its entirety by, the full text
of the Second Amendment to Employment Agreement. In addition, effective
October 1, 2021, Mr. Henshall resigned as a member of the Board.
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Further, on October 4, 2021, Ajei Gopal, a member of the Board, informed the
Company of his decision to resign as a director of the Company, effective on
such date. Dr. Gopal, who is the President and Chief Executive Officer of Ansys,
advised the Company that his decision to resign did not involve any disagreement
with the Company and was intended to avoid any potential conflict of interest
that could arise because Mr. Calderoni, now in the position of Interim Chief
Executive Officer of the Company, also serving as a member of the Board of
Directors of Ansys. Following the resignations of Dr. Gopal and Mr. Henshall
from the Board, the Board reduced its size to eight members.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. Description
99.1* Press Release issued by Citrix Systems, Inc. on October 6, 2021
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* Furnished herewith
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