Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Employment Agreement with Bradley J. Peterson
On October 1, 2020, Nasdaq, Inc. (the "Company") entered into an employment
agreement with Bradley J. Peterson, the Company's Chief Information and Chief
Technology Officer (the "Employment Agreement"). The term of the Employment
Agreement is October 1, 2020 through December 31, 2023 (the "Term"). The
Employment Agreement replaces Mr. Peterson's existing employment agreement with
the Company, which was due to expire on July 31, 2021.
Mr. Peterson's annual base salary during the Term shall be no less than
$600,000, which shall be reviewed by the Management Compensation Committee (the
"Compensation Committee") of the Board of Directors at least annually and may be
increased but not decreased. In addition, for each calendar year during the
Term, Mr. Peterson will continue to be eligible to participate in the Company's
executive incentive program in accordance with the terms of such program, as
established from time to time by the Compensation Committee. Mr. Peterson will
be eligible to earn, for each full calendar year of the Term, an annual target
bonus of not less than $900,000, based on the achievement of performance goals
established for such year by the Company's President and Chief Executive Officer
and the Compensation Committee. The President and Chief Executive Officer and
the Compensation Committee shall review the target bonus at least annually and
may increase (but not decrease) the target bonus on the basis of such review.
The target bonus amount for each year during the Term shall not be less than the
target bonus amount for the immediately preceding year. Additionally,
Mr. Peterson will be eligible to receive annual equity compensation incentive
awards with a target value of not less than $1.8 million. During the Term,
Mr. Peterson will be entitled to continue to participate in all employee benefit
plans or programs of the Company on the same basis as benefits are generally
made available to its senior executive employees.
Upon a termination of Mr. Peterson's employment by the Company without "Cause"
(as defined in the Employment Agreement), by Mr. Peterson for "Good Reason" (as
defined in the Employment Agreement) other than due to a "Change in Control" (as
defined in the Employment Agreement) or upon Mr. Peterson's retirement at the
end of the Term, Mr. Peterson will be entitled to severance pay and benefits as
follows: (i) a pro-rata target bonus with respect to the calendar year in which
the date of termination occurs, payable in substantially equal monthly
installments for the twelve (12) month period following the date of termination;
(ii) the continued vesting of outstanding equity compensation issued prior to
the date of termination as though Mr. Peterson was employed through all
applicable performance periods; (iii) $40,000 to offset the COBRA premiums for
Mr. Peterson's health benefits, payable in a lump sum within sixty (60) days of
the date of termination; and (iv) twenty-four (24) months of financial and tax
services and executive physical exams.
Upon a termination of Mr. Peterson's employment by the Company without "Cause"
or by Mr. Peterson for "Good Reason" in the twenty-four (24) month period
following a "Change in Control," he will be entitled to receive: (i) a lump sum
payment equal to the sum of (a) two times his annual base salary for the
calendar year immediately preceding the date of termination and (b) his target
bonus amount for the calendar year immediately preceding the date of
termination, payable on the first day of the seventh (7th) month following the
date of termination; (ii) a pro-rata target bonus with respect to the calendar
year in which the date of termination occurs, subject to the achievement of the
performance goals and payable in a lump sum on the first day of the seventh
(7th) month following the date of termination (or, if later, within thirty
(30) days of the date the Compensation Committee determines that performance
goals are satisfied); (iii) a taxable monthly cash payment equal to the COBRA
premiums for the highest level of coverage available under the Company's health
care coverage at active employee rates for twenty-four (24) months (or, if
earlier, until the date Mr. Peterson is eligible for coverage from another
employer); and (iv) continued life insurance and accidental death and
dismemberment insurance benefits for the same period as the continued health
coverage payments.
Upon a termination of Mr. Peterson's employment due to death or "Permanent
Disability" (as defined in the Employment Agreement), Mr. Peterson (or his
estate, if applicable) will receive (i) a pro-rata target bonus with respect to
the calendar year in which the death or Permanent Disability occurred, payable
in a lump sum within thirty (30) days following the effective date of the
release of claims and (ii) the accelerated vesting of all unvested equity awards
awarded to Mr. Peterson as of October 1, 2020.
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All severance payments and benefits under the Employment Agreement are subject
to the execution of a release agreement by Mr. Peterson 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 Employment
Agreement also includes a non-competition provision for a period of two years
following the date of termination, regardless of the reason for the termination
of employment, as well as customary provisions regarding non-solicitation and
non-disparagement.
The foregoing summary of the material terms of the Employment Agreement does not
purport to be complete and is subject to, and qualified in its entirety by, the
full text of the Employment Agreement, a copy of which will be subsequently
filed with the Securities and Exchange Commission.
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