Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment
of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Manish Chawla to Position of Chief Revenue Officer
We appointed Manish Chawla to the position of Chief Revenue Officer, effective
April 18, 2022. Mr. Chawla will serve at an annual salary of $400,000, subject
to adjustment from time to time in our discretion. He will have a bonus target
of $400,000 for the fiscal year ending June 30, 2023, but will not be eligible
for a bonus payout with respect to the fiscal year ending June 30, 2022. On
April 18, 2022, Mr. Chawla received equity grants of $1,500,000 in value of
restricted stock units representing contingent rights to receive 9,263 shares of
common stock and stock options to acquire 10,647 shares of common stock at a
purchase price of $161.95 per share. Such equity awards will vest in 16 equal
quarterly installments on the last business day of each calendar quarter,
commencing September 30, 2022.
Mr. Chawla was employed by International Business Machines Corporation (NYSE:
IBM) from April 2008 to April 2022, where he served in various roles of
increasing responsibility, including Global General Manager, Industrial Sector
from August 2021 to April 2022, Global Managing Director, Energy, Resources,
Manufacturing Industries from March 2019 to July 2021 and Global General
Manager, Resources and Manufacturing Industries from January 2016 to February
2019. From 1999 to 2008, Mr. Chawla served in various roles of increasing
responsibility at BearingPoint, Inc., a multinational management and technology
consulting firm. Mr. Chawla holds a Bachelor of Engineering degree in Computer
Engineering from Delhi College of Engineering and a Master of Business
Administration degree from Indian Institute of Management Ahmedabad. He is 49
years old.
There are no relationships or related party transactions involving Mr. Chawla or
any member of his immediate family required to be disclosed pursuant to Item
404(a) of Regulation S-K.
Executive Retention Agreement with Manish Chawla
We entered into an executive retention agreement, or the Executive Retention
Agreement, with Manish Chawla dated April 18, 2022 with respect to terms of his
employment as our Chief Revenue Officer.
Pursuant to the terms of the Executive Retention Agreement, if no change in
control (as defined) has occurred, and Mr. Chawla's employment is terminated
without cause or he resigns for good reason (which includes constructive
termination, relocation, and a reduction in salary or benefits), he will be
entitled to receive the following:
•for 12 months following the date of termination, an amount equal to Mr.
Chawla's base salary then in effect, payable on our normal payroll cycle over
such period?
•an amount equal to Mr. Chawla's total target bonus for the fiscal year,
pro-rated for the portion of the fiscal year elapsed prior to termination,
payable in equal installments with the base salary payments payable to him?
•an amount equal to 12 times the excess of (a) the monthly premium payable by
former employees for continued coverage under COBRA for the same level of
coverage, including dependents, provided to Mr. Chawla under our group health
benefit plans in which he participates immediately prior to termination over (b)
the monthly premium paid by active employees for the same coverage immediately
prior to termination, payable in one lump sum;
•an amount equal to the cost to Mr. Chawla of providing life, disability and
accident insurance benefits, payable in one lump sum, for a period of 12 months;
•to the extent not already paid, any other amounts due to Mr. Chawla under any
other plan, program, policy or agreement, including any accrued vacation pay;
and
•outplacement services through one or more firms of Mr. Chawla's choosing,
payable by us up to an aggregate amount of $45,000, which services will extend
until the earlier of (a) 12 months following the date of termination, and (b)
the date he secures full-time employment.
If within 12 months following a change in control, Mr. Chawla's employment is
terminated without cause or he resigns for good reason (which includes
constructive termination, relocation, a reduction in salary or benefits, our
failure to obtain an agreement from any of our successors to assume the
Executive Retention Agreement, any material breach by us of the Executive
Retention Agreement, and our failure to pay benefits when due), then Mr. Chawla
shall be entitled to receive the following:
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•Mr. Chawla's base salary and any accrued vacation pay through the date of
termination, in each case to the extent not already paid, payable in one lump
sum;
•an amount equal to the sum of Mr. Chawla's base salary then in effect and the
higher of his target bonus for (a) the then-prior fiscal year and (b)
then-current fiscal year, payable in one lump sum;
•an amount equal to 12 times the excess of (a) the monthly premium payable by
former employees for continued coverage under COBRA for the same level of
coverage, including dependents, provided to Mr. Chawla under the our group
health benefit plans in which he participates immediately prior to termination
over (b) the monthly premium paid by active employees for the same coverage
immediately prior to termination, payable in one lump sum;
•an amount equal to the cost to Mr. Chawla of providing life, disability and
accident insurance benefits, payable in one lump sum for a period of 12 months?
•to the extent not already paid, any other amounts due to Mr. Chawla under any
other plan, program, policy or agreement, payable in one lump sum;
•full vesting of (a) all common stock options then held by Mr. Chawla, which
options may be exercised by the executive for a period of twelve months
following the date of termination (subject to the original expiration date of
such options), and (b) all restricted stock and restricted stock units then held
by Mr. Chawla, provided that vesting for awards that are subject to performance
conditions will be based on assumed performance at the greater of (i) Mr.
Chawla's target level and (ii) the level of performance achieved by Mr. Chawla
immediately prior to termination, as determined by our board of directors; and
•outplacement services through one or more firms of Mr. Chawla's choosing,
payable by us up to an aggregate amount of $45,000, which services will extend
until the earlier of (a) 12 months following the date of termination, and (b)
the date Mr. Chawla secures full-time employment.
The Executive Retention Agreement provides that in the event the total payments
or distributions received by Mr. Chawla relating to termination of employment
are subject to excise tax imposed by Section 4999 of the Internal Revenue Code
of 1986, the payments or distributions will be reduced to the extent such
reduction will result in Mr. Chawla retaining a larger amount, on an after-tax
basis, than if he had received all of the payments or distributions in full, in
each case first reducing or eliminating the portion of the payments that are not
payable in cash and then by reducing or eliminating cash payments.
The Executive Retention Agreement terminates on the earliest to occur of (a)
July 31, 2023, provided that such date will be automatically extended on August
1 of each year thereafter unless we have given at least six months' prior notice
of termination to Mr. Chawla, (b) the first anniversary of a change in control,
and (c) our payment of all amounts due to Mr. Chawla following a change in
control.
The foregoing description of the Executive Retention Agreement is not intended
to be complete and is qualified in its entirety by reference to the Executive
Retention Agreement included as Exhibit 10.1 to this report and incorporated in
this report by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
Executive Retention Agreement, dated April 18, 2022, between Aspen
10.1 Technology, Inc. and Manish Chawla
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