Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On
The Special Award is in lieu of any future equity awards to
The Special Award has a full grant date value of approximately
Aligned with Stockholder Interests
The Compensation Committee and the Board, after consultation with the
Compensation Committee's independent compensation consultant, believe that the
Special Award aligns
The Board and the Compensation Committee believe that, because the Special Award represents only approximately 1.29% of the Company's common stock outstanding on the Grant Date, the dilutive effect on stockholders is reasonable given the increase in stockholder value that would be created by achievement of the performance milestones.
Factors Considered in Designing the Special Award
In determining the appropriateness of granting the Special Award, the Board and the Compensation Committee reviewed the relevant market benchmarks prepared by the Compensation Committee's independent compensation consultant and considered, among other factors, the following:
•The significant value expected to be generated for stockholders, if the performance goals are achieved; •The value of other equity incentives currently held byMr. Bernshteyn (including amounts unvested); •The value of similar equity awards granted for above-and-beyond effort in recent years to chief executive officers of other publicly traded companies that have a similar industry focus; and •The blend of industry experience and knowledge thatMr. Bernshteyn brings to the Company and importance of his strategic contributions and demonstrated leadership for the successful execution of the Company's growth strategy.
Material Terms of the PSUs
The PSUs provide
Notwithstanding any earlier achievement of the Performance Metrics, to support
long-term retention, no portion of the PSUs will vest unless
The Subscription Revenue Goal and Share Price Goal for a particular tranche may be achieved at different points in time and in any order, provided that each tranche of PSUs will be earned upon the later of the applicable Performance Metric determined to be achieved. Subject to any applicable recoupment provisions and forfeiture terms described in the PSU award agreement, once a goal is achieved, it is forever deemed achieved for purposes of determining the vesting of a tranche.
Under the terms of the Special Award, there is no automatic full acceleration of the PSUs upon a "change in control." Rather, in connection with a change in control, the service condition will be deemed satisfied with respect to any outstanding PSUs. With regard to the Performance Metrics, the Subscription Revenue Goal will be disregarded, and achievement of the Share Price Goal will be measured
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using the per share common stock price received by the stockholders in the change in control, applying linear interpolation if achievement falls between two Share Price Goals. Any PSUs that are earned in connection with a change in control, and any outstanding PSUs earned prior to the change in control, will vest in connection with the change in control (to the extent not previously vested), and any unearned PSUs will be forfeited, unless continued, assumed or substituted in connection with certain changes in control.
In the event
In the event the Company engages in any material acquisitions or divestitures during the Performance Period, the Performance Metrics (to the extent not previously achieved) may be adjusted by the administrator in its reasonable, good faith discretion in an effort to prevent diminution or enlargement of the benefits under the PSUs. Without limiting the Board's discretion to adjust the Performance Metrics in the event of a material acquisition or divestiture, it is expected that the Subscription Revenue Goal would be increased or decreased, as applicable, by the trailing four-quarter subscription revenue of the business subject to such acquisition or divestiture, and the Share Price Goal would be recalculated based on the adjusted Subscription Revenue Goal.
Material Terms of the RSUs
The RSUs vest 60% on
Except in connection with certain terminations, no interim vesting opportunities are provided prior to the approximately three-year anniversary of the Grant Date to support retention and alignment with long-term stockholder interests.
Notwithstanding the foregoing, in the event
The PSUs and RSUs were granted under the Company's 2016 Equity Incentive Plan
and are memorialized in individual award agreements. Cause, good reason and
change in control have the meanings given to them in
The foregoing summary of the terms and conditions of the PSUs and RSUs set forth above do not purport to be complete and are qualified in their entirety by reference to the provisions of the Company's 2016 Equity Incentive Plan and the applicable forms of award agreements, copies of which have been or will be filed as an exhibit to the Company's Quarterly Reports on Form 10-Q.
Forward-Looking Statements
This Current Report on Form 8-K includes forward-looking statements. All statements other than statements of historical facts (including statements relating to the intended effects of the Special Award and the potential achievement by the Company of subscription revenue and share price goals or satisfaction by the CEO of service-based conditions that are necessary for the Special Award to vest) are forward-looking statements. These forward-looking statements are based on the Company's current expectations regarding future events and trends, including with respect to incentivizing the CEO, and the Company's financial condition and results of operations.
These forward-looking statements are subject to a number of risks, uncertainties
and assumptions that may cause actual results to differ materially from those
expectations, including, without limitation: the Company is subject to
macroeconomic uncertainties driven by the war in
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the growth of its revenues will be adversely affected; because its platform is sold to large enterprises with complex operating environments, the Company encounters long and unpredictable sales cycles; the markets in which the Company participates are intensely competitive; the Company's business depends in part on its customers renewing their subscriptions and purchasing additional subscriptions; the Company may not be successful in expanding its sales efforts or developing widespread brand awareness in a cost-effective manner; the actual performance of the recipient of the Special Award, including any external or internal factors that may affect such performance; the Company's strategies, including in connection with any changes in control, acquisitions, assets sales, and personnel decisions or policies; risks and liabilities related to breach of its security measures or unauthorized access to customer data; and the impact of foreign currency exchange rates and global economic conditions.
These and other risks and uncertainties that could affect the Company's future
results are included under the captions "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations," in
the Company's quarterly report on Form 10-Q filed with the
The forward-looking statements in this release reflect the Company's expectations as of the date hereof. The Company undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in its expectations.
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